- Finance Minister Nirmala Sitharaman proposed reducing personal-use import tariffs from 20% to 10%
- Duty-free input limits for seafood exports increased from 1% to 3% of previous year’s export turnover
- Duty exemptions extended to shoe upper exports and defence aircraft parts for MRO activities
Finance Minister Nirmala Sitharaman on Sunday proposed a calibrated reset of customs duties in her Budget speech, cutting the tariff on personal-use imports and expanding duty‑free access to inputs for key export industries.
The package lowers costs for households, cushions exporters facing higher barriers abroad and builds capacity in defence, clean energy and critical minerals.
Sitharaman proposed reducing the tariff rate on all dutiable goods imported for personal use from 20 percent to 10 percent. The move puts immediate savings in consumer baskets and signals policy predictability for import‑reliant categories that feed modern retail and e‑commerce.
The customs duty exemptions and aid to export comes after the United States President Donald Trump imposed 50 per cent tariffs on imports of Indian goods, affecting the Indian textile, seafood and other exports.
Seafood processors, among the most exposed to higher duties in the United States, receive targeted relief.
“I propose to increase the limit for duty-free imports of specified inputs used for processing sea foods for export from the current one per cent to three per cent of the FOB value of the previous year's export turnover. I also propose to allow duty-free imports of specified inputs, which is currently available for exports of leather or synthetic footwear to exports of shoe uppers as well,” the Minister said.
The higher ceiling lets exporters import more raw material and additives at zero duty, lowering per unit costs and helping preserve price competitiveness and jobs in coastal clusters. Extending the footwear benefit to shoe uppers moves relief upstream in a labour‑heavy value chain where small factories assemble components on tight margins.
Defence maintenance, repair and overhaul gets a cost and speed advantage. “It is proposed to exempt basic customs duty on raw materials imported for the manufacture of parts of aircraft to be used in maintenance, repair or overhaul requirements by units in the defence sector,” Sitharaman said. Cheaper, faster sourcing of certified inputs can improve turnaround times for fleets and keep more MRO work onshore.
Clean energy and storage receive a broad duty reprieve aimed at scaling domestic manufacturing and grid integration. “I propose to extend the basic customs duty exemption given to capital goods used for manufacturing lithium-ion cells for batteries to those used for manufacturing lithium-ion cells for battery energy storage systems also. I propose to exempt the basic customs duty on the import of sodium antimonate for use in the manufacturing of solar glass. It is proposed to provide basic customs duty exemption to the import of capital goods required for the processing of critical minerals in India,” she said. Lower duties on capital goods reduce upfront capex for new lines and speed technology absorption in batteries, solar glass and mineral processing.
On long‑horizon energy, the Budget locks in policy certainty. “I propose to extend the basic customs duty exemption on import of goods required for nuclear power projects till 2035 and expand it for all nuclear plants irrespective of their capacity,” the Minister said.
The expanded scope reduces project risk across the pipeline. The government will also support mineral‑rich states such as Odisha, Kerala, Andhra Pradesh and Tamil Nadu to establish dedicated rare earth corridors, building domestic capability in inputs vital for electronics, defence and electric mobility.
Sitharaman's package avoids tit‑for‑tat tariffs while shoring up competitiveness. Cutting the personal‑use import tariff from 20 percent to 10 percent eases landed prices for a wide range of goods without subsidies.
Experts say raising the seafood duty‑free input cap to 3 percent directly offsets the squeeze from higher foreign tariffs. Extending duty‑free inputs to shoe uppers backs a labour‑intensive export segment. Exemptions for defence MRO inputs reduce costs and improve readiness. Duty breaks for lithium‑ion cells, battery energy storage, solar glass and critical mineral processing push India down the cost curve in supply chains that matter for growth, energy security and jobs.
