Budget 2026 expectations: Deloitte calls for customs duty overhaul; seeks higher allocations for exports

Rationalising import duties and stepping up budgetary allocations in the upcoming Union Budget could give a strong push to domestic manufacturing and exports, Deloitte India said on Tuesday.

The consulting firm said the Budget for 2026-27, which is scheduled to be presented on February 1, should build on the government’s ongoing efforts to strengthen manufacturing at home and improve India’s export competitiveness.





It argued that a more balanced customs duty structure would improve export competitiveness.

“A key measure would be to further rationalise the customs duty structure,” said Gulzar Didwania, Partner at Deloitte India, as quoted by news agency PTI.

He suggested lowering duties on parts and components in sectors where India has already built adequate manufacturing capacity, while increasing duties on finished goods.

According to him, this would discourage imports of fully-made products, promote domestic value addition and create a stronger base for exports.

Deloitte also pitched for reforms to the Special Economic Zone (SEZ) regime to improve competitiveness and reduce disputes.

These include allowing domestic supplies on a duty-forgone basis, easing sub-contracting rules and exempting value addition from customs duty. The firm also suggested a limited customs amnesty scheme to help cut down litigation, as per PTI.

Didwania further said the Phased Manufacturing Programme (PMP), which has shown positive results in sectors such as mobile phones and electronics, should be extended to other priority manufacturing areas.

He added that higher budgetary support for research and development, along with technology upgradation, would help India move up the value chain and export finished products.

The firm also called for higher allocations and an extension of the Market Access Initiative (MAI) scheme to strengthen export promotion bodies and help Indian exporters expand their presence in global markets.

India’s merchandise exports during April–November 2025-26 rose 2.62 per cent to $292.07 billion, while imports increased 5.59 per cent to $515.21 billion, taking the trade deficit to $223.14 billion.