Union Budget 2026: FM Nirmala Sitharaman Proposes Customs Duty Relief On Leather, Synthetic Footwear, Textile Garments; Check Details Inside

Union Budget 2026: Finance Minister Nirmala Sitharaman on Sunday announced a broad set of customs duty rationalisations and policy measures in the Union Budget 2026-27, aimed at boosting exports, strengthening domestic manufacturing, and easing input costs across key sectors.

Union Budget 2026: Export Push For Marine, Leather, And Textile Sectors

To support exports of marine, leather, and textile products, Sitharaman proposed increasing the limit for duty-free imports of specified inputs used in seafood processing for exports from 1 per cent to 3 per cent of the previous year’s FOB export turnover.

She also announced that the existing duty-free import facility for inputs used in exporting leather or synthetic footwear will now be extended to shoe uppers. In another relief measure, the time limit for exporting finished goods has been extended from six months to one year for exporters of leather and textile garments, footwear, and other leather products.

Union Budget 2026: Relief For Energy, Nuclear, And Critical Minerals

The Finance Minister proposed extending the basic customs duty (BCD) exemption on capital goods used to manufacture lithium-ion battery cells to those used for battery energy storage systems. She also announced a BCD exemption on imports of sodium antimonate used in solar glass manufacturing.

In the nuclear power sector, Sitharaman proposed extending the existing BCD exemption on imports for nuclear power projects till 2035, while expanding the benefit to all nuclear plants, irrespective of capacity. The Budget also proposed a BCD exemption on capital goods required for processing critical minerals within the country.

Boost For Green Energy, Aviation, And Electronics

The Finance Minister said the entire value of biogas will be excluded while calculating central excise duty on biogas-blended compressed natural gas (CNG).

The Budget proposed exempting BCD on components and parts used in manufacturing civilian training and other aircraft, along with duty-free imports of raw materials for aircraft parts used in maintenance, repair, and overhaul (MRO) by defence sector units. Sitharaman also announced a BCD exemption on specified parts used in microwave oven manufacturing.

Addressing the under-utilisation of manufacturing capacity in special economic zones (SEZs) due to global trade disruptions, Sitharaman announced a one-time measure allowing eligible SEZ manufacturing units to sell goods in the domestic tariff area at concessional duty rates.

What Was In Previous Union Budget?

In the previous Budget, the government introduced several customs duty exemptions to support domestic manufacturing. These included exemptions for 35 capital goods used in EV battery production and 28 for mobile phone battery manufacturing, along with duty-free imports of cobalt powder, lithium-ion battery waste, lead, zinc, and other critical minerals.

The BCD on knitted fabrics was raised to 20 per cent or ₹115 per kg, whichever is higher, to promote technical textiles. Export duty on crust leather was removed, while wet blue leather was fully exempted from BCD to encourage domestic processing.

Additionally, BCD on Interactive Flat Panel Displays was increased from 10 per cent to 20 per cent, while duty on Open Cell components was set at 5 per cent. Exemptions on raw materials and components for shipbuilding were extended by 10 years, and BCD on carrier-grade Ethernet switches was cut from 20 per cent to 10 per cent.

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