The Union Budget 2026–27 proposes a set of measures on Customs and Central Excise to simplify the tariff structure, support domestic manufacturing, promote exports, and address duty inversion, the Finance Minister said while presenting the Budget in Parliament.
The proposals include the withdrawal of certain long-standing customs duty exemptions on items now manufactured domestically or where imports are negligible. To simplify rate determination, the Budget also seeks to move select effective rates from customs notifications into the tariff schedule.
To promote exports, the Budget proposes raising the limit for duty-free imports of specified inputs used in seafood processing for export from 1 per cent to 3 per cent of the FOB value of the previous year’s export turnover. It also extends the facility of duty-free imports of specified inputs—currently available for exports of leather or synthetic footwear—to exports of shoe uppers.
Also Read: Union Budget 2026: Key Governance Updates and Policy Highlights
The Budget further proposes extending the time limit for export of final products from six months to one year for exporters of leather or textile garments, leather or synthetic footwear, and other leather products.
On energy transition and security, the Budget proposes extending the basic customs duty exemption on capital goods used for manufacturing lithium-ion cells for batteries to include capital goods used for manufacturing lithium-ion cells for battery energy storage systems.
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