India's benchmark 10-year government bond yield has recorded a marginal decline, settling at 6.6334%. This movement represents the latest development in the country's government securities market, which serves as a crucial indicator for the broader fixed-income landscape.

Current Yield Position

The 10-year government bond yield now stands at 6.6334%, marking a slight decrease from previous levels. This yield level reflects the current market assessment of India's sovereign debt instruments.

Market Significance

The 10-year government bond yield serves as a fundamental benchmark in India's financial markets. It influences pricing across various debt instruments and reflects investor confidence in government securities. The yield movement indicates the prevailing market conditions and investor sentiment towards sovereign debt.

Government bond yields play a critical role in determining borrowing costs for both the government and corporate entities. Financial institutions and investors closely monitor these yield movements as they impact portfolio valuations and investment decisions across the fixed-income segment.

A staggering ₹1.52 lakh crore of customs duty remains locked in litigation, creating significant uncertainty for businesses across India. With 38,014 cases pending as of March 2024, industry experts are pushing for government intervention through an amnesty scheme in the upcoming Budget 2026-27 to resolve these long-standing disputes.

Massive Litigation Backlog Creates Business Uncertainty

The scale of customs disputes has reached unprecedented levels, with Price Waterhouse & Co highlighting the urgent need for resolution. Gautam Khattar, Principal at Price Waterhouse & Co LLP, emphasised that an amnesty scheme would provide much-needed certainty to businesses by closing historic disputes that have been dragging on for years.

Customs Duty Structure Rationalisation on the Horizon

Beyond dispute resolution, experts are advocating for a comprehensive overhaul of India's customs duty framework. The current structure comprises eight Basic Customs Duty (BCD) slabs, including a zero percent rate, which was already reduced from a higher number in the Union Budget 2025-26. However, further consolidation is deemed necessary.

Khattar explained that the government should consider reducing the current eight slabs to just five or six slabs. This rationalisation would address complexities in the duty structure and make compliance easier for businesses while maintaining revenue objectives.

Free Trade Agreements Create Inverted Duty Challenges

A critical issue emerging from India's expanding network of free trade agreements is the inverted duty structure, where finished products attract lower customs duties than the raw materials used in their manufacturing. This anomaly has created competitive disadvantages for domestic manufacturers who face higher costs for inputs compared to imported finished goods.

The Narendra Modi government has actively pursued trade partnerships, signing agreements with multiple countries and engaging in negotiations with major economic blocs. While these agreements boost trade volumes, they have inadvertently created duty inversions that need addressing through targeted rate adjustments.

Industry Expectations for Budget 2026-27

Industry stakeholders are looking beyond dispute resolution and duty rationalisation. Trade facilitation measures, particularly faster customs clearances, are high on the wishlist for the upcoming budget. These improvements would complement the proposed structural changes and create a more efficient trade ecosystem.

The combination of an amnesty scheme, duty structure simplification, and enhanced trade facilitation could significantly improve India's ease of doing business rankings while providing the certainty that businesses need for long-term planning and investment decisions.