India's push for Make in India is expected to persist in the upcoming interim Budget, with the government focusing on addressing customs duty inversions across multiple products. The Ministry of Commerce has submitted a list of items to the finance ministry, aiming to rectify the inverted structure in customs duties on specific products. An inverted duty structure arises when the import duty on finished goods is lower than that imposed on the raw materials used in their production, as explained by a government official.

This situation arises when local manufacturers face challenges in competitively pricing their finished goods due to higher levies on the imported raw materials or components used in their production. To encourage domestic value addition and support local manufacturing, the upcoming interim Budget for 2024-25 may address this issue for key items. This aligns with the government's broader goal of promoting exports and fostering domestic value addition.

In the previous budget for 2023-24, the central government made adjustments to Basic Custom Duty (BCD) rates, reducing them from 21 percent to 13 percent for various goods, excluding textiles and agriculture. Notably, the BCD on electric kitchen chimneys was raised from 7.5 percent to 15 percent, while the duty on heat coils was lowered from 20 percent to 15 percent. This change aimed to correct the duty structure inversion and promote the manufacturing of electric kitchen chimneys.

Addressing inverted duty structures is essential for domestic manufacturers to level the playing field with other countries by reducing import duties on raw materials or components. Commerce Minister Piyush Goyal had previously mentioned that Indian domestic manufacturers face a disadvantage when raw materials or intermediate items enter the country at zero duty through Foreign Trade Agreements or other channels.