FTAs and Customs Revenue: India’s Duty Foregone Explained
Why in the news
Trade talks with the US, EU and UK may squeeze customs revenue, projected to grow just 2.1% to ₹2.4 trillion in FY26.
Key facts
- Total duty foregone in FY25: ₹94,172 crore.
- Only 25% of imports are under FTAs now; expected 60-65% after the new deals.
| FTA partner | Duty foregone (FY25) |
|---|---|
| Japan | ₹12,038 crore |
| ASEAN | ₹37,875 crore |
| South Korea | ₹10,335 crore |
| Australia | ₹5,234 crore |
| UAE | ₹4,841 crore |
Deals in the pipeline
- US: bilateral trade agreement (BTA) talks to start in 7-8 months.
- EU: deadline December 2025.
- UK: no deadline; Piyush Goyal stressed speed, not haste.
Concerns
High Indian tariffs mean deep cuts under FTAs, so revenue loss grows; policymakers must balance liberalisation with protecting domestic industry.