The Union Budget 2026–27 proposes a reduction in the tariff rate on all dutiable goods imported for personal use from 20 per cent to 10 per cent, aiming to rationalise the customs duty structure.
The Budget also proposes exemption from basic customs duty on 17 drugs or medicines to provide relief to patients, particularly those undergoing cancer treatment. In addition, seven more rare diseases will be included for the purpose of exempting import duties on personal imports of drugs, medicines and Food for Special Medical Purposes used in their treatment.
Provisions governing baggage clearance during international travel will be revised to address passenger concerns. The changes include enhanced duty-free allowances and clearer rules on the temporary carriage of goods brought into or taken out of the country. The Budget also allows taxpayers to settle customs disputes by paying an additional amount in lieu of penalty to close pending cases.
To streamline customs procedures, the duty deferral period for Tier 2 and Tier 3 Authorised Economic Operators will be extended from 15 days to 30 days. Eligible manufacturer-importers will also be provided the same facility, encouraging accreditation under the Tier 3 AEO framework. The validity of advance rulings binding on Customs will be extended from three years to five years.
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Government agencies will be encouraged to use AEO accreditation for preferential cargo clearance. Regular importers with established supply chains will be recognised in the risk management system to reduce repetitive verification of cargo.
Export cargo using electronic sealing will be allowed clearance from factory premises to the ship. For imports not requiring compliance, filing of the bill of entry by a trusted importer and arrival of goods will automatically trigger customs clearance.
The customs warehousing framework will be shifted to a warehouse operator-centric system based on self-declarations, electronic tracking and risk-based audits, replacing officer-dependent approvals to reduce delays and compliance costs.