Union Budget 2026: Sitharaman Unveils Wide Customs Duty Relief Across Key Sectors

Finance Minister Nirmala Sitharaman announced several customs duty exemptions in the Union Budget 2026–27. These cover sectors such as critical minerals, nuclear power, batteries, electronics, defence, aviation, and exports.

The goal is to simplify tax rates, support domestic production, improve export competitiveness, and remove old exemptions that are no longer required.

Old Exemptions to Be Phased Out

The government will withdraw duty exemptions on goods that are now manufactured in India or where imports are minimal, helping clean up the long list of outdated concessions.

Relief for Patients and Personal Imports

• Customs duty on goods imported for personal use will be cut from 20% to 10%.
• 17 cancer-related medicines will be fully exempt from basic customs duty.
• Seven additional rare diseases have been added to the list of duty-free imports.

Boost for Marine, Leather and Textile Exports

• Duty-free input imports for seafood exporters will rise from 1% to 3% of last year’s export value.
• Duty-free input benefits will now apply to shoe uppers, not just finished footwear.
• Export time limits for leather, footwear, and textile garments have been extended from 6 months to one year.

Support for Electronics and SEZ Units

• Customs duty will be removed on select microwave oven components to increase value addition in electronics.
• SEZ manufacturing units facing low capacity use will get one-time relief, allowing limited domestic sales at lower duty rates.

Clean Energy and Nuclear Power Push

• Duty exemptions on goods used to make lithium-ion cells will continue and now include battery energy storage systems.
• Exemptions on solar glass inputs will be extended.
• Customs duty relief for nuclear power project imports will continue till 2035, regardless of plant size.

Read more: Budget 2026: Nil-Deduction Certificate Scheme Explained: What It Means for Small Taxpayers?

Focus on Critical Minerals and Aviation

• Goods used to process critical minerals in India will be exempt from basic customs duty to strengthen supply chains.
• Aircraft parts, components, and raw materials will get duty relief, supporting both civil and defence aviation manufacturing.

Conclusion

Budget 2026’s customs duty changes signal a strong push towards domestic manufacturing, cleaner energy, export growth, and affordable healthcare, while trimming outdated tax exemptions for a simpler tariff system.

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