India Defers Customs Duty for Manufacturers
Analysis based on 8 articles · First reported Mar 01, 2026 · Last updated Mar 02, 2026
The introduction of deferred customs duty payments for Eligible Manufacturer Importers by the India===Central Board of Indirect Taxes and Customs is expected to positively impact the Indian manufacturing sector. This measure will improve cash flow and working capital management for businesses, potentially leading to increased investment and production.
The India===Central Board of Indirect Taxes and Customs (CBIC) in India has introduced a new facility for 'Eligible Manufacturer Importers' (EMIs), allowing them to defer customs duty payments. This initiative, announced in the Union Budget for 2026-27, permits EMIs to clear imported goods without immediate duty payment, instead paying on a monthly basis as per the Deferred Payment of Import Duty Rules, 2016. The scheme, effective from April 1, 2026, to March 31, 2028, aims to enhance cash flow and working capital for manufacturers, thereby boosting domestic manufacturing and improving ease of doing business in India. Eligibility criteria include compliance with Customs and GST, turnover, financial standing, and past track record. Existing AEO-T1 entities, including Ministry of Micro, Small and Medium Enterprises, are also eligible. The scheme encourages higher compliance levels, with approved EMIs expected to progressively obtain AEO-T2 or AEO-T3 status.
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