Indian Economy News

Budget 2026: Smarter import duties can do the heavy lifting for manufacturing, says Deloitte India

As the Union Budget 2026–27 approaches, Deloitte India has emphasised the need for smarter import duty reforms and increased budgetary support to strengthen domestic manufacturing and enhance the competitiveness of Indian exports. The firm has recommended rationalising the customs duty structure by reducing duties on parts and components in sectors where domestic manufacturing has matured, while increasing duties on finished goods. According to Deloitte, such measures would discourage the import of fully built products and encourage greater domestic value addition. These reforms are also expected to help reduce litigation, improve the ease of doing business, and support the development of a larger and more robust manufacturing base in India.
Deloitte India also recommended several reforms to the Special Economic Zone (SEZ) regime to improve operational flexibility and competitiveness. These include permitting duty-foregone domestic supplies, relaxing sub-contracting norms, exempting value addition from customs duties, and introducing a limited customs amnesty scheme. The firm also highlighted the benefits of expanding the Phased Manufacturing Programme (PMP) to additional priority manufacturing segments, along with higher allocations for research and development and technology upgrades, to help India move up the global value chain.

In addition, Deloitte recommended increased budgetary support for export promotion schemes such as the Market Access Initiative (MAI) to strengthen export infrastructure and expand exporters’ global reach. With India’s merchandise exports continuing to grow alongside persistent trade deficits, these targeted duty and regulatory reforms are expected to support sustained growth in manufacturing and exports in the coming years.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.