Budget 2026-27 Proposes Withdrawal Of Select Customs Exemptions, Tariff Simplification

The Union Budget 2026–27 proposed changes to India's customs duty framework aimed at simplifying the tariff structure and reducing long-standing distortions.

Presenting her indirect tax proposals, Finance Minister Nirmala Sitharaman said, “To further simplify the tariff structure, support domestic manufacturing, promote export competitiveness, and correct inversion in duty, I propose to remove certain long-continuing customs duty exemptions on items which are being manufactured in India or where imports are negligible.”

She also announced a structural change to how duty rates are presented. “To further simplify the process of ascertaining the rate of duty applicable on a particular item, I propose to incorporate certain effective rates in various customs notifications into the tariff schedule itself,” Sitharaman said.