The tariff phaseout by 2029 will make food cheaper. Para tariffs, including the Export Development Board Cess (CESS) and the Port and Airport Development Levy (PAL), are charged on top of customs duties. They make food imports 28% more expensive and agricultural produce 13% pricier, according to the World Bank’s April 2026 South Asia Economic Update. The poorest rural households, who spend 31% of their income on manufactured food, will gain the most. The World Bank calls the tariff phase-out “particularly pro-poor among rural households.”
Food costs the most
CESS and PAL at nearly 30% are the highest on processed food and beverages
On processed food and beverages, CESS accounts for 21.9% of import charges and PAL 6.3%; on agriculture, 10.9% and 2.1% respectively. “In line with the new National Tariff Policy,” the World Bank noted, the government has committed to “fully eliminate its PAL and CESS para-tariffs by 2029.”
The same households stand to gain 3.7% in purchasing power, compared to the poorest urban households that will gain 3.3%.
When import duties are added, processed food and beverages incur total duties of 60%, including CESS, PAL, and other para-tariffs. For agriculture, the statutory customs duty is 15%, and the total levies 30%.