The Union Budget 2026, presented by Finance Minister Nirmala Sitharaman on Sunday, has proposed changes to the basic customs duty rate for several items.
The government aims to reduce input costs, boost domestic manufacturing, and promote export competitiveness.
The new rates take effect from 2 February 2026.
Goods with lower customs duty
- Critical Minerals: Customs duty on monazite has been reduced from 2.5% to nil.
- Renewable Energy: Customs duty on sodium antimonate used in solar glass manufacture has been cut from 7.5% to nil. Specified capital goods for manufacturing lithium-ion cells for Battery Energy Storage Systems (BESS) will also attract zero duty.
- Nuclear Energy: Several changes have been made here. Customs duty on all goods required for nuclear power generation (tariff item 8401 30 00) has been reduced from 7.5% to nil. The same applies to control and protector absorber rods, and burnable absorber rods falling (tariff item 8401 40 00). Goods for specified nuclear power projects registered with the Customs House by 30 September 2035, in compliance with Project Import Regulations, 1986, will also attract zero duty.
- Electronics: Customs duty on goods required for manufacturing microwave ovens (tariff item 8516 50 00) has been reduced to nil.
- Civil Aviation: Duty on components and parts, including engines, required for aircraft manufacturing and parts of aircraft has been reduced to nil.
- Defence: Goods required for the manufacture of parts of aircraft for maintenance, repair, or overhauling purposes will now attract zero customs duty, as will components or parts of aircraft, including engines, when imported by PSUs under the Ministry of Defence.
- Drugs/Medicines: 17 drugs/medicines that will be added to List 3 under Table I of the notification No. 45/2025-Customs will also see customs duty reduced from the applicable 5% or 10% to zero. Additionally, drugs/medicines for seven rare diseases that are part of the National Policy for Rare Disease (NPRD), 2021, to be added to List 22 under Table I of the aforementioned notification will also see customs duty reduced from applicable rates to nil.
- Personal imports: All goods imported for personal use and subject to customs duty under Chapter 9804 will see rates unchanged or reduced from 10% or 20% respectively, to a flat 10%.
Goods with higher or modified customs duty
- Chemicals: Customs duty on potassium hydroxide has been hiked from zero to 7.5%.
- Umbrellas and associated parts: Umbrellas (apart from garden umbrellas) covered under tariff items 6601 9100 and 6601 9900 currently carry a customs rate of 20%. This will either remain 20% or be charged at ₹60 a piece, whichever is higher. Similarly, parts, trimmings, and other accessories under tariff heads 6601 to 6602 will continue to attract the present 10% customs duty or a charge of ₹25 per kg, whichever is higher.
