Deloitte India has proposed significant reforms in the upcoming Union Budget to give a strong push to domestic manufacturing and exports. The consulting firm made these recommendations on Tuesday, ahead of the Budget presentation scheduled for February 1, 2026.
Customs Duty Rationalization
Gulzar Didwania, Partner at Deloitte India, emphasized the need for a more balanced customs duty structure. He suggested lowering duties on parts and components in sectors where India has already developed adequate manufacturing capacity. Simultaneously, he recommended increasing duties on finished goods.
This approach aims to discourage imports of fully-made products. It would promote domestic value addition and create a stronger foundation for exports. Didwania believes this measure would significantly improve India's export competitiveness.
Special Economic Zone Reforms
Deloitte also pitched for reforms to the Special Economic Zone (SEZ) regime. The firm proposed several changes to enhance competitiveness and reduce disputes. These include allowing domestic supplies on a duty-forgone basis, easing sub-contracting rules, and exempting value addition from customs duty.
Additionally, the consulting firm suggested implementing a limited customs amnesty scheme. This initiative would help cut down litigation and streamline processes for businesses operating in SEZs.
Extending Phased Manufacturing Programme
Didwania highlighted the success of the Phased Manufacturing Programme (PMP) in sectors like mobile phones and electronics. He recommended extending this programme to other priority manufacturing areas. The PMP has shown positive results in boosting domestic production and reducing import dependence.
Budgetary Support for R&D and Technology
The Deloitte partner stressed the importance of higher budgetary support for research and development. He also emphasized the need for technology upgradation. These investments would help India move up the value chain and enable the country to export more finished products.
Didwania argued that such support is crucial for enhancing India's manufacturing capabilities and global competitiveness.
Strengthening Export Promotion
Deloitte called for higher allocations and an extension of the Market Access Initiative (MAI) scheme. This move would strengthen export promotion bodies and assist Indian exporters in expanding their presence in global markets. The firm believes that targeted support can help Indian businesses tap into new international opportunities.
Current Trade Scenario
India's merchandise exports during April–November 2025-26 rose 2.62 per cent to $292.07 billion. Imports increased 5.59 per cent to $515.21 billion during the same period. This resulted in a trade deficit of $223.14 billion.
The consulting firm's recommendations come against this backdrop of growing trade figures. Deloitte India aims to provide constructive inputs for the government's budget planning process. The firm hopes these suggestions will contribute to India's economic growth and global trade position.
