New Delhi: Finance Minister Nirmala Sitharaman announced significant reductions in customs duties across various sectors in the Union Budget 2026-27, presented in the Lok Sabha on Sunday. These measures aim to strengthen manufacturing and enhance exports, covering key industries such as marine products, textiles, leather, defence, and aviation.
To promote the export of marine products, the government proposed increasing the duty-free import limit for inputs used in seafood processing. This limit has been raised from 1 percent to 3 percent of the previous year’s export turnover.
The finance minister also extended the duty-free import facility previously available for leather and synthetic shoe exports to include the export of shoe uppers. This expansion is expected to boost employment and income in labour-intensive industries.
Exporters of leather, textiles, synthetic shoes, and other leather products will now have one year instead of six months to ship the finished goods.
Basic customs duty exemptions on machinery used to manufacture lithium-ion batteries will now also cover battery energy storage systems. Additionally, customs duty will be waived on imports of sodium antimonate, used in solar glass production.
The budget provides customs duty exemptions on parts used in the manufacture of civilian training aircraft and other planes. Defence sector units importing raw materials for aircraft repair and maintenance will also benefit from duty waivers.
Exemptions from basic customs duty are proposed for specific parts used in microwave oven manufacturing.
Due to global trade disruptions, many Special Economic Zone (SEZ) factories are not operating at full capacity. To address this, the government has allowed eligible SEZ units to sell goods in the domestic market at reduced customs duty as a one-time relief.
The customs duty exemption on imports of items used in the nuclear power sector has been extended until 2035 and will now apply to all nuclear plants regardless of capacity.
Customs duty exemptions will also be granted on machinery imported for processing critical minerals in the country.
Furthermore, the value derived from biogas will not be included in the calculation of central excise duty on biogas-blended compressed natural gas (CNG), the finance minister stated.
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