Union Budget 2026-27: A Mixed Bag for Food and Beverage Sector
The Union Budget 2026-27, presented by Finance Minister Nirmala Sitharaman, has delivered a combination of favorable and challenging news for Indian consumers and businesses. As we delve into the specifics affecting the food and beverage industry, it becomes clear that certain commodities are set to become more affordable, while others will see price hikes. This budgetary framework aims to stimulate domestic manufacturing, reduce production costs, and bolster the overall economy, directly impacting household budgets across the nation.
Commodities That Will Become Cheaper
Several key items in the food and beverage sector are expected to see reduced prices due to strategic fiscal measures introduced in the budget.
Microwave Ovens: More Affordable for Consumers
Good news awaits individuals planning to purchase new microwave ovens, as these appliances are poised to become more budget-friendly. The government has exempted basic customs duty on specified parts used in their manufacture. This initiative is designed to enhance value addition within the domestic consumer electronics sector, decrease reliance on imported components, and ultimately lower manufacturing costs, making ovens more accessible to a wider audience.
Seafood Processing Inputs: Enhanced Flexibility for Processors
According to budget data, the duty-free import limit for inputs used in seafood processing has been increased from 1% to 3%. This adjustment grants processors greater flexibility in sourcing raw materials and equipment, potentially reducing input costs and improving their competitiveness in the global market. This move could lead to more affordable seafood products for consumers.
Biogas-Mixed CNG: Boosting Clean Energy
The budget includes reforms aimed at reducing the cost of producing biogas-based CNG, thereby enhancing its competitiveness against traditional fossil fuels. This initiative is likely to strengthen the connection between agriculture and clean energy, offering farmers additional income opportunities by supplying agro-residues, cattle dung, and organic waste. As a result, consumers may benefit from more economical and environmentally friendly fuel options.
Commodities That Will Become Costlier
On the flip side, certain items are set to experience price increases due to changes in customs duties and other indirect taxes.
Commercial LPG Cylinders: Higher Costs for Businesses
It has been reported that the price of the 19-kg commercial LPG cylinder has increased by ₹49 effective from 1 February 2026, raising the new rate in Delhi to ₹1,740.50. This revision is expected to impact restaurants, hotels, cafés, and street-food vendors that heavily rely on LPG for their daily operations. Notably, domestic LPG prices remain unchanged, providing some relief to households.
Coffee Roasting and Vending Machines: Increased Equipment Costs
Budget data reveals that the government has withdrawn existing exemptions on coffee roasting, brewing, and vending machines. This decision is anticipated to drive up the cost of such equipment, potentially affecting coffee shops and businesses that depend on these machines for their operations.
Alcohol: Higher Prices for Consumers
As per the Union Budget, due to an increase in customs duty and adjustments to other indirect taxes, consumers should expect to pay more for alcohol at local liquor stores or bars starting this spring. This change is part of broader fiscal measures aimed at revenue generation and could influence spending habits in the beverage sector.
Overall Impact on the Economy and Households
The Union Budget 2026-27's focus on lowering production costs and supporting domestic manufacturing is poised to have a ripple effect on the food and beverage industry. While some items become cheaper, promoting affordability and consumption, others face cost increases that may affect business operations and consumer choices. Experts suggest that these measures will ultimately boost economic growth by enhancing domestic capabilities and reducing import dependency.
