In a significant move aimed at bolstering India's economic growth and enhancing affordability, Finance Minister Nirmala Sitharaman unveiled key customs duty reforms as part of the Union Budget 2026-27. The announcements focus on providing relief across critical sectors, including manufacturing, healthcare, and tourism, while also supporting strategic industries like aviation.
Customs Duty Exemptions for Manufacturing and Renewable Energy
The Budget continues exemptions on capital goods required for lithium-ion cell manufacturing and critical mineral processing, a step that is expected to strengthen India's position in the electric vehicle and renewable energy supply chains. Additionally, relief has been provided for sodium antimonate, a key input for solar glass production, which should lower costs for the solar power sector and promote clean energy adoption.
Healthcare and Affordability Measures
In a major boost for healthcare, customs duty on 17 oncology drugs has been removed, a move that is anticipated to significantly reduce treatment costs for cancer patients across the country. This decision aligns with the government's focus on making essential medicines more accessible and affordable.
Support for Tourism and Exports
The Budget also includes measures to make overseas tourism packages more affordable, potentially boosting outbound travel. Furthermore, duty benefits have been extended to marine product inputs and sports equipment, which could enhance export competitiveness in these sectors. Shoe upper exports are set to become cheaper, supporting the leather and footwear industry.
Aviation and Strategic Sectors
To strengthen India's aviation ecosystem, customs exemptions have been announced for components used in civilian and training aircraft manufacturing. This initiative is expected to encourage domestic aircraft production and reduce dependency on imports, fostering innovation and job creation in the aerospace sector.
Adjustments for Luxury and Imported Goods
While many sectors receive duty relief, the Budget indicates that certain luxury items, imported alcohol, watches, and coffee machines may see higher prices due to adjusted customs duties. This could be part of a broader strategy to promote domestic manufacturing and curb non-essential imports.
Overall, the customs duty reforms in Union Budget 2026-27 reflect a balanced approach, aiming to stimulate key industries, improve healthcare access, and support strategic sectors while making necessary adjustments to manage import dynamics. These measures are poised to have a lasting impact on India's economic landscape in the coming fiscal year.
