Budget 2026 Brings Cheaper Foreign Shopping for Indian Consumers
The Union Budget 2026-27 has delivered welcome news for Indian shoppers who purchase goods from overseas, with a significant reduction in import duties set to make foreign products more affordable starting April. The government has proposed lowering the basic customs duty on all dutiable goods imported for personal use from 20% to 10%, a move that will directly benefit consumers buying items from abroad.
How the Customs Duty Reduction Works
This tariff relaxation applies to goods imported for personal consumption, whether purchased during international travel or through online platforms. According to Meyyappan Nagappan, partner at Trilegal specializing in tax and impact finance, the reduction in customs duty should also decrease the integrated GST charged on imported goods. Many e-commerce websites currently sell to Indian customers without handling customs, GST, or importation processes, leaving consumers to manage these aspects independently.
"This will bring down the cost of such transactions for consumers," Nagappan explained. When Indians purchase foreign goods online, they typically engage customs house agents to clear items through customs and pay applicable duties. Import duties are levied beyond certain value thresholds that vary depending on product categories.
Impact on Popular Import Categories
The timing of this measure is particularly significant as the weakening rupee has been increasing the cost of imported goods. The duty reduction is expected to soften this financial impact, making products more accessible to Indian consumers. Among the most popular items that Indians tend to purchase abroad are:
- iPhones and other electronic gadgets
- Premium and luxury bags
- Designer shoes and footwear
- Perfumes and fashion accessories
Sohrab Bararia, partner at Grant Thornton Bharat, noted that personal imports of electronics and accessories will now become more affordable for Indian consumers. Rising disposable incomes have enabled more middle-class households to spend on overseas travel and shopping, both through physical stores and online platforms.
Broader Economic Implications
Vimal Pruthi, tax partner at EY India, emphasized that "the measure aligns customs provisions with inflation and evolving travel patterns while easing the cost of personal imports." Experts believe this tariff relaxation will also help curb informal import channels and encourage compliance with official customs procedures.
Ayush Mehrotra, partner at Khaitan & Co., provided additional context: "Imports under this category for personal use are typically high-volume but low yield from a revenue and litigation perspective. As such, a lower rate of duty would likely improve compliance and reduce friction on valuation disputes and discretionary assessments at the passenger interface."
Mehrotra added that holistically, this change is consistent with the objective of reducing financial burden on households while streamlining import processes. The move comes as Indian tourists have emerged among the biggest spenders on luxury goods in destinations like Singapore, according to a report published last year by a leading business association in that country.
This customs duty reduction represents a strategic adjustment to contemporary consumption patterns, acknowledging the growing trend of Indians shopping internationally while addressing practical challenges in the import ecosystem.
