Budget 2026 Unveils Major Customs and Excise Reforms to Boost Trade
The Government of India, on Sunday, announced a comprehensive series of measures targeting Customs and central excise duties as part of the Union Budget 2026-27. These initiatives are strategically designed to streamline the tariff structure, bolster domestic manufacturing capabilities, and enhance export competitiveness in the face of escalating global trade tensions.
Key Measures for Simplified Tariffs and Ease of Living
Finance Minister Nirmala Sitharaman proposed a significant reduction in the tariff rate on all dutiable goods imported for personal use, slashing it from 20% to 10%. This move is aimed at promoting ease of living for citizens by making imported personal items more affordable and accessible.
Accelerating India's Role in Global Trade
To help accelerate India's participation and market share in international trade, the Finance Minister outlined several reforms for Customs processes. The primary goal is to minimize intervention, ensuring smoother and faster movement of goods while providing greater certainty to traders and businesses.
Key reforms include:
- Recognition of regular importers with trusted, long-standing supply chains in the risk assessment system. This will reduce the need for frequent cargo verification, expediting clearance for reliable traders.
- Implementation of electronic sealing for export cargo, allowing clearance directly from factory premises to ships, thereby cutting down on logistical delays.
- Automated clearance approvals for imports that do not require compliance checks. Trusted importers can file bills of entry, and upon goods arrival, Customs will be automatically notified, enabling immediate release.
Transforming Customs Warehousing and Digital Integration
The Customs warehousing framework is set for a major overhaul, shifting to a warehouse operator-centric system. This new approach will feature self-declarations, electronic tracking, and risk-based audits. According to Sitharaman, these reforms will move away from officer-dependent approvals, significantly reducing transaction delays and compliance costs for businesses.
Furthermore, by the end of the fiscal year, approvals for cargo clearance from various government agencies will be seamlessly processed through a single, interconnected digital window. Sitharaman also announced plans to roll out a Customs-integrated system within two years. This platform will serve as a unified, scalable solution for all Customs processes, enhancing efficiency and transparency across the board.
These bold steps underscore the government's commitment to fostering a more business-friendly environment, driving economic growth, and positioning India as a formidable player in the global trade arena.
