The Budget 2026-27 has simplified the customs regime by rationalising exemptions, waiving customs duty on 17 cancer drugs, while easing baggage rules and reducing duty to 10 per cent on goods imported for personal use.
Finance minister Nirmala Sitharaman on Sunday unveiled a “trust-based” customs regime, which will have a single window system for cargo clearances, lesser verification for regular importers with trusted, longstanding supply chains, easier duty payment norms for Authorised Economic Operators (AEOs) and use of AI in scanning at ports.
Sitharaman also announced that honest taxpayers can settle customs disputes by payment of an additional amount, in lieu of penalty, and promised to roll out a Customs Integrated System (CIS) in two years for all customs processes.
She also announced that the advance ruling will be binding on customs authorities for five years, up from three years currently.
He further said the customs warehousing framework will be transformed into a warehouse operator-centric system with self-declarations, electronic tracking and risk-based audit.
Sitharaman, in her speech, said that the Customs proposal “aims to further simplify the tariff structure, support domestic manufacturing, promote export competitiveness and correct inversion in duty”.
The “reforms will move away from the current system of officer-dependent approvals and reduce transaction delays and compliance costs”, she said.
The Budget proposed to revise provisions governing baggage clearance during international travel to address the concerns of passengers. The revised rules will enhance duty-free allowances in line with present-day travel realities and provide clarity in the temporary carriage of goods brought in or taken out.
Under the Baggage Rules 2016, Indian residents and foreigners residing in India arriving from countries other than Nepal, Bhutan, or Myanmar can bring ₹50,000 worth of duty-free goods. With regard to the import of goods for personal use, the Budget proposes to reduce the tariff rate on all such dutiable goods from 20 per cent to 10 per cent. The personal use goods would exclude motor vehicles, alcohol and tobacco.
Basic customs duty on a range of capital goods and strategic inputs have been removed. The Budget has also raised the duty-free import limit for inputs used in seafood processing from 1 per cent to 3 per cent of export value, lowering costs.
Anand Ramanathan, partner & consumer industry leader, Deloitte India, said securing inputs in natural fibres through the national fibre scheme will help derisk exports from disruptions in global supply chains.