In the Union Budget 2026-27, Finance Minister Nirmala Sitharaman announced transformative changes in indirect taxes. and customs duties aimed at simplifying the tariff structure, boosting domestic manufacturing, promoting exports, supporting critical sectors, and providing relief to citizens.
Indirect Tax & Customs Announcements:
1. Simplification of Customs Tariff Structure:
To streamline import and export processes for industrial goods, the government has restructured the customs tariff framework. Complex duty slabs have been reduced and rationalised, minimising classification disputes and making compliance easier for importers and exporters.ZAVYA 925 Sterling Silver Modest Triple Tone Chain Bracelet (Single) | Gift for Women and Girls | With Certificate of Authenticity and 925 Hallmark
2. Relief on Life-saving Drugs and Medicines:
In a major step to ease the financial burden on patients, full customs duty exemption has been granted on 13 key cancer-treatment drugs. Additional concessions apply to medicines for rare diseases and severe chronic conditions, significantly reducing medical costs for vulnerable sections of society.
3. Critical Minerals:
Basic Customs Duty (BCD) has been completely removed on 25 strategic critical minerals essential for future technologies. This includes lithium, cobalt, copper, and rare earth elements, making them more affordable. The move will strongly support atomic energy, space research, defence manufacturing, and green technology industries.Also Read: Union Budget 2026: FM Unveils ‘Four-Engine Strategy’ to Power Viksit Bharat 2.0
4. Electronics & Lithium-Ion Batteries:
To position India as a global electronics hub, BCD on mobile phones and key components has been reduced to 15%. For lithium-ion battery manufacturing (core to electric vehicles), customs duties on raw materials and capital goods have been slashed or exempted. This is expected to lower prices of EVs and scooters, accelerating adoption of eco-friendly transport.
5. Shipping & Ship Repair Sector:
To strengthen India's maritime capabilities, new incentives have been introduced. Tax exemptions are provided for investments in ship maintenance, repair, and overhaul (MRO) activities. New ship-repair centres announced in Varanasi and Patna will promote cheaper inland waterways cargo movement and boost employment in the sector.
6.Telecom Sector – Duty Equalisation:
To resolve long-standing classification disputes, BCD on 'Carrier Grade Ethernet Switches' has been reduced from 20% to 10%. This will bring down the cost of internet and networking equipment, improving telecom infrastructure rollout and digital connectivity across the country.Also Read: Budget 2026: Coastal Karnataka to Get Key Nesting Site Under Tourism Development Push
These bold indirect tax reforms align with the vision of 'Make in India', 'Atmanirbhar Bharat', and 'Viksit Bharat' by fostering self-reliance, reducing import dependence, encouraging green technologies, and improving ease of doing business.Also Read: Budget 2026: From High-Speed Rails to Content Creator Labs – FM’s Bold Vision for a Modern India