Union Budget 2026-27 Unveils Comprehensive Export Strategy with Manufacturing and Trade Reforms
In a significant development aimed at bolstering India's global trade footprint, the Union Budget 2026-27 has introduced a series of strategic measures designed to strengthen the country's export ecosystem. Commerce Secretary Rajesh Agrawal emphasized on Sunday that the budget focuses on manufacturing expansion and trade facilitation to enhance competitiveness on the international stage.
Targeted Support for Diverse Sectors
Agrawal described the budget as "an excellent Budget which provides a strong systemic support to the trade ecosystem". He highlighted that it includes targeted support for both labour-intensive industries and high-technology sectors. Policy steps on logistics and trade facilitation are expected to reduce compliance burdens significantly, thereby improving India's share in global trade and promoting trade diversification.
The secretary pointed out that sector-specific announcements will further strengthen export competitiveness in key areas:
- Electronics
- Information Technology
- Pharmaceuticals
- Marine products
- Leather
- Textiles
- Semiconductors
Special Focus on Leather Exports
In a sector-focused move, Finance Minister Nirmala Sitharaman proposed duty-free imports of certain specified inputs to support leather exports. This measure is particularly aimed at providing relief to leather exporters who are facing steep US tariffs of approximately 50 percent. According to official data, India's leather and leather products exports dipped marginally by 0.23 percent to $3.3 billion during April–December 2025-26.
Revival of Industrial Clusters and SEZ Reforms
The commerce ministry announced plans to revive 200 legacy industrial clusters through infrastructure and technology upgradation. This initiative is expected to:
- Reduce production costs
- Improve productivity
- Enhance the competitiveness of traditional export hubs
Furthermore, reforms in Special Economic Zones (SEZs) are designed to improve capacity utilisation, enhance economies of scale, and strengthen the overall resilience of the SEZ ecosystem while maintaining export orientation. The ministry noted that "one-time facilitation for limited Domestic Tariff Area sales at concessional duties and extended tax incentives for cloud and data-centre operations are expected to attract global manufacturers and technology players to SEZs."
Boosting Small Exporters and E-commerce
To support small exporters and boost e-commerce-driven shipments, the budget removes the Rs 10 lakh value cap on courier exports. Additionally, improved processes for handling returned consignments will reduce friction in global business-to-consumer trade, making cross-border transactions smoother and more efficient.
Extensions and Regulatory Reforms
The budget also includes extensions of concessional customs duty regimes for gold and silver dore bars and lab-grown diamond inputs, which are expected to support domestic refining and value addition in these sectors.
For the IT and IT-enabled services sector, the government has proposed targeted tax and regulatory reforms, including:
- Unified classification of IT services
- Higher safe-harbour thresholds
- Automated approvals
- Faster Advance Pricing Agreements
- Long-term policy certainty
These measures are anticipated to enhance India's attractiveness for Global Capability Centres and international service providers, positioning the country as a preferred destination for technology investments.
Overall, the Union Budget 2026-27 presents a holistic approach to reinvigorating India's export landscape through strategic interventions across manufacturing, logistics, and sector-specific support, aiming to drive sustainable growth in global trade.
