BUDGET SERIES- Sector Focus on F&D

By Shubhi Mishra, UKIBC

3rd August, 2024

The recently announced Union Budget 2024-25 includes several key highlights concerning the agriculture, food, and drink sector:

• Amendment to keep Extra Neutral Alcohol outside the purview of central tax: Section 9 is being amended to take Extra Neutral Alcohol used in manufacture of alcoholic liquor for human consumption out of the purview of central tax. Similar amendments are also proposed in IGST Act and UTGST Act;
• For enhancing ‘Ease of Doing Business’, the current administration is working on the Jan Vishwas Bill 2.0. Further, states will be incentivised for implementation of their Business Reforms Action Plans and digitalisation;
• Setting up of 100 food quality and safety testing labs with National Accreditation Board for Testing and Calibration Laboratories (NABL) accreditation will be facilitated;
• The budget emphasises promoting indigenous products, including agricultural produce and traditional food items, which produce opportunities to explore new markets and collaborations;
• Agriculture allocation stands as INR1.52 lakh crore. Highlights include the mission for pulses and oilseeds to strengthen their production, storage and marketing and encouraging shrimp farming, processing and export;
• Strategy to be developed to achieve Atmanirbharta (self-reliance) and strengthen production, storage and marketing of oilseeds, such as mustard, groundnut, sesame, soybean, and sunflower and pulses;
• Custom duty rates are rationalised to further support the “Make In India” initiative. Basic Customs Duty rate on shea nuts reduced from 30% to 15%.

Furthermore, BCD rate reduced for products such as live SPF shrimp, live black tiger shrimp, SPF polychaete worms, oil use in manufacture of aquatic feed (fish lipid, crude fish and algal), prawn and shrimps feed, fish feed;

• Financial support for setting up of 50 multi-product food irradiation units in the Micro Small and Medium Enterprises (MSME) sector will be provided:
• FDI rules to be simplified to facilitate investments, nudge prioritisation, and encourage use of Indian Rupee as a currency for overseas investments.

UKIBC’s Food and Drink sector team will continue to address ease of doing business and market access concerns, engaging with decision-makers at both federal and state levels. We will work closely with both the federal and state governments in India to advance broader objectives for leading British and Indian cooperations. invested in the UK-India corridor.

We welcome the Union Budget 2024-25 and are confident that it will positively influence our strategic decisions and operational frameworks in the coming fiscal year.

For more details write to Shubhi Mishra, Head Food and Drink.

Shubhi.mishra@ukibc.com