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The Economic Survey 2025-26 has proposed greater coordination between income tax and customs authorities in the valuation of related-party imports, citing the need to lower compliance costs, reduce litigation and make India more attractive for global manufacturing and investment. In the chapter on the external sector titled "Playing the Long Game", the Survey highlighted a long-standing challenge faced by companies operating in global value chains (GVCs), the same import transaction being revie
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FAQ :
The Survey proposes greater coordination between income tax and customs authorities in valuing related-party imports.
The aim is to lower compliance costs, reduce litigation, and make India more attractive for global manufacturing and investment.
Currently, the same import transaction is reviewed independently by income tax (for transfer pricing) and customs authorities (for valuation), leading to duplicated documentation and higher costs.
A collaborative convergence model is recommended, involving common valuation approaches, shared documentation, and coordinated administrative reviews.
It is expected to reduce compliance burden, minimise disputes, enhance transparency, and improve the ease of doing business.
The changes are expected to position India as a competitive hub within global supply chains, improving its attractiveness for manufacturing and investment.
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