Sitharaman Signals Next Big Reform: Customs Overhaul After Income Tax Simplification

Union Finance Minister Nirmala Sitharaman on Friday announced that the government’s next focus of reforms will be a comprehensive overhaul of the customs duty system, drawing parallels with the simplification of the income tax regime. She was speaking at the 23rd Hindustan Times Leadership Summit on December 6, 2025.

“We made sure that income tax is no longer a tiresome exercise,” Sitharaman said, recalling that the previous I-T system was often labeled as “tax terrorism”. Speaking with HT Editor-in-Chief R Sukumar, she noted, “Income tax rates were not the problem — it was the administration that made compliance painful, sometimes agonising.”

She highlighted the government’s efforts to move to a faceless, online income tax system, emphasizing that similar principles of transparency and efficiency need to be applied to customs.

Acknowledging ongoing challenges, Sitharaman admitted that smuggling and contraband remain serious issues. “We have steadily brought down customs duties over the last two years. Customs is the next big assignment,” she said.

A Track Record of Policy Reforms

An economist by training and a Jawaharlal Nehru University alumnus, Sitharaman has served in key ministerial roles throughout PM Narendra Modi’s 11-year tenure. Her current portfolio as Finance and Corporate Affairs Minister, which she assumed after the 2019 elections, has seen her spearhead major economic policies, including reforms during the COVID-19 pandemic, simplification of tax structures, and initiatives to boost investment and growth.

Sitharaman’s rise in politics has been marked by key leadership roles: she was Minister of State (Independent Charge) for Commerce and Industry after 2014, Union Minister of Defence in 2017, and subsequently Finance Minister.

With her sights now set on customs, the government aims to bring the same ease, transparency, and efficiency that transformed India’s income tax system to another critical area of economic administration.