NEW DELHI: In search of to cushion key export sectors from the impression of steep US tariffs, finance minister Nirmala Sitharaman on Sunday introduced a set of focused customs and manufacturing measures within the Union Funds 2026, positioning them as a response to as much as 50% duties imposed by US President Donald Trump on imports of Indian items.Union finance minister Nirmala Sitharaman proposed lowering the tariff charge on all dutiable items imported for private use from 20% to 10%, a transfer seen as a part of a broader effort to recalibrate India’s commerce posture amid rising international dangers.
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Reduction for exporters hit by US duties
With industries similar to textiles and seafood amongst these affected by the US tariff hit, the Funds launched measures geared toward enhancing export competitiveness.According to the federal government’s goal to advertise exports and carry the seafood business hit by US tariffs, Sitharaman proposed growing the restrict for duty-free imports of specified inputs used for processing seafood for export from 1% to three% of the FOB worth of the earlier 12 months’s export turnover.“I suggest to extend the restrict for duty-free imports of specified inputs used for processing sea meals for export from the present one per cent to a few per cent of the FOB worth of the earlier 12 months’s export turnover,” she stated. The finance minister added that duty-free imports of specified inputs at present accessible for exports of leather-based or artificial footwear would even be prolonged to exports of shoe uppers.“I additionally suggest to permit duty-free imports of specified inputs, which is at present accessible for exports of leather-based or artificial footwear, to exports of shoe uppers as nicely,” Sitharaman stated in her Funds speech.These labour-intensive sectors have confronted big challenges within the US, which is a serious export vacation spot, after Trump’s tariff determination.The nation’s leather-based and leather-based merchandise shipments dipped marginally 0.23% to $3.3 billion throughout April-December 2025-26.Throughout April-December 2025, India’s seafood exports rose 15.53% to $6.5 billion, up from $5.67 billion in the identical interval final 12 months.
Responsibility exemptions to push manufacturing
As half of a bigger manufacturing push, Sitharaman introduced a string of primary customs responsibility exemptions.In a lift to the defence sector, she stated uncooked supplies imported for the manufacture of plane elements utilized in upkeep, restore or overhaul (MRO) necessities by models within the defence sector can be exempted from primary customs responsibility.The Funds has supplied for exempting customs responsibility on elements and elements required for manufacturing civilian coaching and different plane. It additionally proposed responsibility exemption on uncooked supplies imported for manufacturing plane elements utilized in upkeep, restore and overhaul by defence sector models.The finance minister proposed exempting BCD on specified elements used within the manufacture of microwave ovens.The finance minister additionally proposed a primary customs responsibility exemption to capital items used for manufacturing lithium-ion cells for batteries and important minerals, extending the responsibility exemption given to capital items used for manufacturing lithium-ion cells to these used for manufacturing lithium-ion cells for battery power storage methods as nicely.She additionally proposed exempting primary customs responsibility on the import of sodium antimonate to be used within the manufacturing of photo voltaic glass, and offering a primary customs responsibility exemption to the import of capital items required for the processing of vital minerals in India.Within the nuclear energy section, Sitharaman proposed extending the essential customs responsibility exemption on import of products required for nuclear energy initiatives until 2035, increasing the profit to “all nuclear vegetation no matter their capability.”
Uncommon earth corridors for mineral-rich states
Sitharaman additionally proposed help for mineral-rich states similar to Odisha, Kerala, Andhra Pradesh and Tamil Nadu to ascertain devoted uncommon earth corridors, as the federal government highlighted a number of initiatives linked to vital minerals.
Spending push whereas holding fiscal line
The Funds additionally marked a spending push geared toward countering international dangers. Capital expenditure will likely be elevated by 9% to Rs 12.2 trillion within the fiscal 12 months starting April 1, with focus areas together with railways, small companies and well being.The fiscal deficit will likely be curbed to 4.3% of GDP within the coming 12 months from an estimated 4.4% within the present 12 months, whereas authorities debt is projected to return right down to 55.6% from 56.1%, Sitharaman stated.“Our first responsibility is to speed up and maintain financial development by enhancing productiveness and competitiveness and constructing resilience to unstable international dynamics,” she stated earlier.Sitharaman introduced the Union Funds for a report ninth time.
