Key Highlights
- Strong push for infrastructure growth and higher capital expenditure
- Big boost to manufacturing, clean energy, EVs, and critical minerals
- Customs duty exemptions and cuts on electronics, solar, aviation, and food items
- Higher taxes, penalties, and duties on tobacco, umbrellas, STT, and select imports
Presenting the Union Budget 2025–26 in the Lok Sabha, Finance Minister Nirmala Sitharaman said the government remains committed to accelerating economic growth despite global uncertainties. The budget places special emphasis on strengthening domestic manufacturing, reducing import dependence, and supporting India’s transition towards clean energy and advanced technology.
A key announcement was the proposal to exempt basic customs duty on capital goods required for processing critical minerals in India. This move aligns with the government’s strategy to promote rare earth and critical mineral ecosystems, essential for electric vehicles, renewable energy, electronics, aerospace, and defence manufacturing.
The finance minister noted that these measures are aimed at improving supply chain resilience and making India a global manufacturing hub, while also delivering cost relief to consumers and exporters in several sectors.
Items That Have Become Cheaper in Budget 2026
- Basic customs duty exempted on specified parts for microwave ovens
- Duty-free imports allowed for specified inputs used in leather exports
- Customs duty exemption on capital goods used to manufacture BESS
- Sodium antimonate exempted for use in solar glass manufacturing
- Customs duty on imports for nuclear power projects exempted till 2035
- Raw materials for aviation parts manufacturing exempted from customs duty
- Overseas tour packages, TCS cut from 5–20% to 2%
- Foreign education, lower TDS under LRS for education expenses
- Shoe upper exports allowed duty-free imports
- Basic customs duty exempted on energy transition equipment
- Frozen turkey meat and edible offal, tariff reduced from 30% to 5%
- Artemia cysts and cancer-related drugs, tariff cut from 5% to nil
- Prawn and shrimp feed, duty reduced from 15% to 5%
- Seeds, fruits, and spores for sowing, tariff cut from 30% to 15%
- Makhana and other roasted nuts and seeds, tariff slashed from 150% to 30%
- Rare-earth metals, including scandium and yttrium, tariff reduced from 5% to nil
- Solar glass chemicals, including sodium antimonate, duty reduced to nil
- Fish caught by fishermenare exempted from customs duty
- Phosphoric acid, duty cut from 7.5% to 5%
Items That Have Become Costlier in Budget 2026
- Income tax misreporting, penalty set at 100% of tax amount
- Non-disclosure of movable assets now attracts a penalty
- Stock options Securities Transaction Tax raised to 0.15%
- STT on futures increased from 0.02% to 0.05%
- Alcoholic liquor, minerals, and scrap sales, TCS raised from 1% to 2%
- Umbrellas and umbrella parts, import duty set at 10% or Rs 25 per kg, whichever is higher
- Floor import price introduced for umbrellas and parts
- Cranberries duty raised to 5%, blueberries to 10%
- Cranberry products duty increased to 10%
- Potassium hydroxide duty raised from nil to 7.5%
- Refrigerated containers duty increased to 5%
- Chewing tobacco, jarda, and gutkha, NCCD hiked sharply from 25% to 60%
Big Picture
Modi 3.0’s third Union Budget seeks to balance growth-oriented reforms with fiscal discipline. While consumers and industries linked to clean energy, electronics, food processing, and exports benefit from lower duties, higher taxes on tobacco, select imports, and financial transactions aim to boost revenue and curb misuse.
