Union Budget 2026: Customs & Trade Facilitation Amendments - Topic-wise Summary with Key Changes (Before vs After)

Overall intent

Simplify tariff, support domestic manufacturing, promote export competitiveness, correct inversion in duty

-

-

1

Policy direction for Customs/Central Excise

-

Review of exemptions

Remove long-continuing exemptions where goods are manufactured in India / imports are negligible

Exemptions existed

Exemptions to be removed (selected items)

2

Rationalisation; fewer distortions

-

Tariff simplification

Shift certain "effective rates" from notifications into tariff schedule

Rates in notifications

Effective rates incorporated into tariff schedule

3

Easier duty rate ascertainment

-

Seafood processing inputs

Increase duty-free import limit for specified inputs used for seafood exports

1% of prior year FOB export turnover

3% of prior year FOB export turnover

Para 4 / D.1

Greater duty-free input access; export boost

-

Shoe uppers

Extend duty-free input benefit to exports of shoe uppers

Not covered

Covered

Para 5 / D.3

Supports leather export value chain

-

Export time limit

Extend time period for export of final product

6 months

12 months / 1 year

Para 6 / D.2

Better compliance feasibility for exporters

-

Li-ion cells (BESS)

Extend BCD exemption on capital goods used for Li-ion cells to BESS also

Exemption existed for Li-ion cells (batteries)

Extended to Li-ion cells for Battery Energy Storage Systems (BESS)

7

Supports energy storage manufacturing

-

Solar glass input

Exempt BCD on sodium antimonate for solar glass

BCD applicable

BCD exempt

8

Lower solar input cost

-

Nuclear power

Extend and expand BCD exemption for nuclear power project imports

Existing exemption (limited)

Extended till 2035; expanded for all plants irrespective of capacity

9

Lower nuclear capex; long runway

-

Critical minerals

BCD exemption on capital goods required for processing critical minerals

BCD applicable

BCD exempt

10

Encourages domestic processing

-

Civil aviation

Exempt BCD on components/parts for manufacture of aircraft

BCD applicable

BCD exempt

12

Supports domestic aircraft manufacturing

-

Defence aviation (MRO)

Exempt BCD on raw materials for manufacture of aircraft parts used in MRO by defence sector units

BCD applicable

BCD exempt

13

Strengthens defence MRO ecosystem

-

Electronics (microwave ovens)

Exempt BCD on specified parts for microwave ovens

BCD applicable

BCD exempt

14

Deepens value addition

-

SEZ – one-time DTA facilitation

Allow eligible SEZ units to sell in DTA at concessional duty, capped by export proportion

Normal rules

One-time concessional duty (limited proportion)

15

Capacity utilisation with level-playing field safeguards

-

Personal imports tariff

Reduce tariff rate on dutiable personal imports

20% (speech)

10%

Para 16 / C.1(12)

Passenger relief; simplified rate

01.04.2026 (as per rate table)

17 drugs/medicines

Exempt BCD on 17 drugs/medicines

5%/10% (as per rate table)

Nil

Para 17 / C.1(10)

Patient relief

02.02.2026

Rare diseases

Add 7 rare diseases for duty exemption on personal imports of drugs/medicines/FSMP

Limited list

Expanded list (+7 diseases)

Para 18 / C.1(11)

Relief for rare disease treatment

02.02.2026

Reform intent

Minimal intervention, faster movement, greater certainty

-

-

19

Framework for reforms

-

AEO duty deferral

Enhance duty deferral for Tier 2 & Tier 3 AEOs

15 days

30 days

20

Cashflow relief to trusted importers

-

Manufacturer-importers deferral

Extend duty deferral to eligible manufacturer-importers

Not available / limited

Same facility extended

21

Encourages Tier-3 AEO accreditation

-

Advance ruling validity

Extend validity of advance ruling binding on Customs

3 years

5 years

22

Better certainty & planning

-

Govt agencies + AEO

Encourage agencies to leverage AEO accreditation

Not structured

Preferential treatment encouraged

23

Faster clearance for accredited entities

-

Risk recognition + e-seal exports

Recognise trusted importers; reduce repeated verification; factory-to-ship clearance for e-sealed exports

Higher verification

Reduced checks; end-to-end clearance

24

Faster movement; lower friction

-

Auto release on arrival

If no compliance: BoE filing + goods arrival auto-notifies customs; immediate release

Officer-led clearance

Auto-triggered immediate release

25

Immediate release; efficiency

-

Warehousing model shift

Warehouse operator-centric system; self-declarations; electronic tracking; risk-based audit

Officer-dependent approvals

Self-declaration + risk audit model

26

Lower delays and compliance costs

-

Single digital window

Integrated window for multi-agency approvals; 70% interdicted cargo processes by April 2026

Fragmented

Single, interconnected digital window

27

Major EoDB improvement

End of FY; April 2026 milestone

No-compliance goods

Clearance immediately after online registration + duty payment

Slower

Immediate clearance

28

Faster clearance

-

CIS

Roll out Customs Integrated System in 2 years

Multiple systems

Single integrated scalable platform

29

Systems consolidation

Within 2 years

Scanning + AI

Expand scanning using advanced imaging & AI; aim to scan every container at major ports (phased)

Partial

Expanded scanning coverage

30

Better risk assessment and speed

Phased

High seas fishing (duty-free catch)

Fish catch by Indian vessel in EEZ/High Seas duty-free; foreign port landing treated as export; safeguards

Duty/uncertain treatment

Duty-free + export recognition + safeguards

Para 31

New export opportunity for fishermen

-

Courier exports cap

Remove ₹10 lakh per consignment cap; improve handling of returns/rejects

₹10 lakh cap

Cap removed; tech-enabled returns/rejects

Para 32 / A.3(iii)-(v)

Boost MSME/startup e-commerce exports

-

Baggage rules revision

Revise baggage rules, enhance duty-free allowances, clarify temporary carriage

Existing rules

Revised rules + new baggage rules issued

Para 33 / A.3(i)

Passenger clarity and relief

-

Settlement by additional amount

Close cases by paying additional amount in lieu of penalty

Penalty stigma

Additional amount route for closure

34

Encourages dispute resolution

-

Extra-territorial jurisdiction

Extend jurisdiction beyond territorial waters for fishing

Within territorial waters

Beyond territorial waters (for fishing activities)

s.1(2)

Enables legal framework for high seas fishing

From assent

Definition

Define "Indian-flagged fishing vessel"

Not defined

Definition inserted

s.2

Removes ambiguity

From assent

Penalty treated as charge

Penalty paid u/s 28(5) deemed charge for non-payment of duty

Not treated as charge

Deemed charge for non-payment of duty

s.28(6) with s.28(5)

Impacts settlement outcomes

From assent

Advance ruling validity

Extend validity of advance ruling

3 years

5 years / till change in law or facts (earlier)

s.28J(2)

Certainty

From assent

Extension of existing rulings

Extend existing rulings on request

Not available

Extend to 5 years from ruling date on request

Proviso to s.28J(2)

Transition relief

From assent

New fishing framework

Insert special provisions beyond territorial waters

No dedicated section

s.56A inserted (duty-free import; export treatment; procedure rules)

New s.56A

Structured compliance & safeguards

From assent

Warehouse transfer

Remove prior permission for transfer between warehouses

Prior permission required

s.67 substituted (transfer subject to prescribed conditions)

Substitute s.67

Faster movement

From assent

Custody regulation

Enable custody provisions under regulations

Limited

"custody, examination" enabled

s.84(b)

Regulatory empowerment

From assent

Tariff entries

Add/amend/delete tariff entries

Existing schedule

148 new entries; 54 substituted/deleted; 2 amended (Ch 29), 1 amended (Ch 85)

First Schedule

Better classification

Mixed: 02.02.2026 / 01.04.2026; structural 01.05.2026 unless specified

Rate rationalisation

Modify rates for certain items

Existing rates

Modifications in parts

First Schedule

Rationalisation

02.02.2026 / 01.04.2026 (as specified)

Shift effective BCD into schedule

Operationalise effective rates in Tariff instead of notifications

Reliance on exemptions

New lines; amended lines; no effective rate change stated

A.2(i)

Simplification

01.05.2026 unless specified

New monitoring lines

Create lines for coated pipes, precursor chemicals, plant extracts, eco-friendly industries

Lower visibility

Better identification/monitoring

A.2(ii)

Improved data & enforcement

01.05.2026 unless specified

Baggage rules

New baggage rules issued

Old rules

New rules

A.3(i)

Modernises baggage framework

-

Deferred duty payment

Monthly deferral + new eligible importer class

Existing DPID Rules

Rules amended

A.3(ii)

Cashflow + ease

-

Courier exports cap

Remove courier export value cap

Cap existed

Cap removed

A.3(iii)

E-commerce exports

-

Returns/rejects

Relax returns/rejects; return-to-origin allowed

Stricter

Relaxed; return-to-origin

A.3(iv)-(v)

Decongestion + efficiency

-

Monazite

BCD reduced

2.5%

Nil

C.1(1)

Lower input cost

02.02.2026

Sodium antimonate (solar glass)

BCD reduced

7.5%

Nil

C.1(2)

Cheaper solar inputs

02.02.2026

Cap goods for Li-ion cells (BESS)

BCD reduced

As applicable

Nil

C.1(3)

Boost storage manufacturing

02.02.2026

Nuclear goods 8401 30 00

BCD reduced

7.5%

Nil

C.1(4)

Lower nuclear cost

02.02.2026

Absorber rods 8401 40 00

BCD reduced

7.5%

Nil

C.1(5)

Lower nuclear parts cost

02.02.2026

Project imports registered upto 30.09.2035

BCD

As applicable

Nil

C.1(6)

Incentive till 2035

02.02.2026

Microwave oven inputs

BCD reduced

As applicable

Nil

C.1(7)

Value addition

02.02.2026

Aircraft parts/components

BCD reduced

As applicable

Nil

C.1(8)

Manufacturing support

02.02.2026

Defence aircraft parts (MoD PSUs)

BCD reduced

As applicable

Nil

C.1(9)

Defence MRO

02.02.2026

17 drugs/medicines

BCD reduced

5% / 10%

Nil

C.1(10)

Patient relief

02.02.2026

7 rare diseases

Duty exemption

As applicable

Nil

C.1(11)

Treatment relief

02.02.2026

Personal imports (9804)

Tariff

10% / 20%

10%

C.1(12)

Simplified tariff

01.04.2026

Potassium hydroxide

BCD increased

Nil

7.5%

C.2(1)

Higher import cost

02.02.2026

Umbrellas (non-garden)

Duty floor introduced

20%

20% or ₹60/piece (higher)

C.2(2)

Anti-underinvoicing

02.02.2026

Umbrella parts

Duty floor

10%

10% or ₹25/kg (higher)

C.2(3)

Anti-evasion

02.02.2026

Animals and birds imported by Zoo

Table I Sl. 1

-

Alpha pinene

Sl. 113

-

Artificial plasma

Sl. 123

-

Ammonium phosphate / ammonium nitro-phosphate (manure / complex fertilisers)

Sl. 128

-

Potassium sulphate ≤52% K2O

Sl. 132

No change in effective rate

Diagnostic/lab reagents 3822 90 90

Sl. 137

No change in effective rate

INVAR

Sl. 213

-

Coffee roasting/brewing/vending machines (coffee)

Sl. 258

-

Parts of radio trunking terminals

Sl. 285

-

Educational CD-ROMs (books/journals/periodicals/newspapers)

Sl. 287

-

Loco simulators

Sl. 310

-

Naphtha for fertilisers

45/2025 Table I Sl. 93

-

LPG for polyisobutylene (SEZ↔DTA↔SEZ)

Sl. 95

-

Silicon goods for solar wafers/cells

Sl. 107

No change in effective rate

Maltol for deferiprone

Sl. 117

-

Goods for Copper-T contraceptives

Sl. 145

-

EPDM for insulated wires/cables

Sl. 154

-

Non-woven fabrics for adult diapers

Sl. 172

-

Spent catalyst/ash with precious metals

Sl. 201

-

Metal parts for electrical insulators

Sl. 218

-

Pipes/tubes for boilers

Sl. 219

-

Permanent magnets for wind generators >500KW

Sl. 231

-

Zeolite for catalytic converter wash coat

Sl. 236

-

Web offset printing machines + mail room equipment

Sl. 243

-

Cash / automatic banknote dispensers and parts

Sl. 271

-

Film/TV equipment imported by foreign unit/team

Sl. 275

-

Re-import of photographic/filming/sound equipment

Sl. 276

-

Parts/components of digital still image video cameras

Sl. 291

-

Raw materials/parts for e-Readers

Sl. 309

-

X-Ray tubes for X-ray machine manufacture

Sl. 370

-

Flat panel detector for X-Ray machine manufacture

Sl. 372

-

Parts of video games for manufacture

Sl. 397

-

Motion pictures/music/gaming software on media for consoles

Table IV Sl. 1

-

Castor oil cake exemption (SEZ → DTA)

Notif 113/2003-Cus

-

Biogas blended CNG

Exclude biogas/CBG value (and GST on it) from transaction value for excise on blended CNG

Included

Excluded

Para 11 / E.1

Prevents cascading valuation

-

NCCD on tobacco

NCCD rate increased but effective duty maintained via notification

25%

60% (rate), effective maintained at 25%

E.2

Legal rate shift without effective burden change

01.05.2026

Other changes

"Few other changes" – details to be seen in Explanatory Memorandum and budget documents

F

Signals additional fine print beyond provided extract