Import Duty Changes in Budget 2026: Complete Guide for Importers, Exporters & Travelers
Budget 2026 cuts personal goods duty 50%, increases baggage to ₹75k, exempts cancer drugs. Seafood duty-free inputs 3x higher. Complete Guide.
Union Budget 2026 introduces a comprehensive customs duty overhaul affecting both personal and commercial imports. The basic customs duty (BCD) on personal goods is slashed from 20% to 10%, baggage allowance increased by 50%, and capital goods exemptions expanded across critical sectors. These changes simplify tariff structure, reduce import costs, and support manufacturing—effective immediately or by April 1, 2026.
Customs Duty Rate Cut for Personal Goods (50% Reduction)
Budget 2026 introduces the most significant customs duty cut for personal imports in recent years. The tariff rate on all dutiable goods imported for personal use drops from 20% to 10%, representing a 50% reduction in basic customs duty. This change takes effect on April 1, 2026, and applies to all consumer imports, from electronics to jewelry to sporting equipment.
The reduction is part of the government's broader efforts to simplify duty structure and ease the financial burden on individuals ordering goods from international platforms.
Effective Date: April 1, 2026
Some Examples of Items Getting Cheaper After 50% Duty Cut
Personal import duty changes directly impact hundreds of consumer categories. Here's what gets cheaper when the tariff rate drops from 20% to 10%:
Some Exemptions are Also Being Removed
While most personal imports get cheaper, some items face price increases due to removal of outdated exemptions. The tariff structure rationalization means goods now manufactured domestically lose their import duty exemptions.
Items with Import Duty Increases:
1: Gaming Console Components
2: Specific Appliances
- Adult diapers: Additional cost of ₹20 per pack
- Professional coffee roasting/brewing machines
- Imported coffee vending equipment
3: Professional Equipment
- Filming/broadcasting equipment
- Specific TV production cameras
- Sound recording equipment
Duty-Free Baggage has Limit Increase
Budget 2026 increases duty-free baggage allowance significantly, complementing the personal goods duty reduction. These changes take effect on February 2, 2026, allowing travelers to bring more goods into India at no customs duty.
How the Baggage Allowance Works
The baggage allowance change makes international travel shopping more attractive. Here's how to calculate duty on personal goods exceeding the duty-free limit:
Step 1: Add up CIF value of all goods in your baggage
Step 2: Subtract your allowance (₹75,000 for Indians, ₹25,000 for foreigners)
Step 3: Apply customs duty at reduced 10% rate (instead of 20%) on excess amount
Step 4: Add IGST @ 28% on (CIF value + BCD)
Step 5: Add Social Welfare Surcharge @ 10% on total
Real Example:
- You return with ₹100,000 worth of goods
- Duty-free allowance: ₹75,000
- Excess: ₹25,000
- Old duty (20%): ₹5,000
- New duty (10%): ₹2,500
Savings: ₹2,500 per trip
Cancer Drugs Now Fully Duty-Free
Budget 2026 exempts 17 critical cancer drugs from basic customs duty, expanding existing medical import relief. These drugs now attract 0% customs duty (previously 20%), providing significant savings for cancer patients.
17 Cancer Drugs with Zero Duty (Tariff Rate 0%):
- Ribociclib
- Abemaciclib
- Talycabtagene autoleucel
- Tremelimumab
- Venetoclax
- Ceritinib
- Brigatinib
- Darolutamide
- Toripalimab
- Serplulimab
- Tislelizumab
- Inotuzumab ozogamicin
- Ponatinib
- Ibrutinib
- Dabrafenib
- Trametinib
- Ipilimumab
Rare Disease Medications Added to Exemption List
Seven new rare diseases have been added to the duty-free import list for medicines and Food for Special Medical Purposes (FSMP). These now have 0% import duty with proper medical certification.
Seven Rare Diseases (Duty-Free Medicines):
- Congenital Hyperinsulinemic Hypoglycemia (CHI)
- Familial Homozygous Hypercholestrolemia
- Alpha Mannosidosis
- Primary Hyperoxaluria
- Cystinosis
- Hereditary Angioedema
- Primary Immune Deficiency Disorders
Total Medicines Exempted: 129 medicines now have duty-free status
Commercial Import Duty Changes: Export Sectors
- Seafood & Marine Exports: Duty-Free Input Limit Increase
Budget 2026 significantly increases the duty-free input allowance for seafood exporters. This tariff rationalization removes a major cost barrier for India's marine processing industry. - Leather & Footwear Exports: New Duty-Free Coverage
The import duty exemption for leather exporters now extends to shoe uppers, not just finished footwear. This tariff extension provides significant cost savings for footwear component manufacturers. - Textile Exports: Extended Timeline for Duty Exemptions
Textile and leather garment exporters get a major advantage with extended export completion timeline from 6 months to 1 year. This import duty benefit allows better production planning and working capital management. - Lithium-Ion Battery & Energy Storage Equipment (0% Duty)
Budget 2026 continues and expands the tariff exemption on capital goods for battery and energy storage manufacturing. This zero-duty import policy supports India's clean energy transition and electric vehicle ecosystem. - Nuclear Power Projects: Exemption Extended Until 2035
The import duty exemption on goods for nuclear power projects is extended from 2025 to 2035, a 10-year extension providing long-term certainty for the nuclear sector. - Critical Minerals Processing: New Zero-Duty Category
A new tariff exemption covers capital goods for processing critical minerals in India. This customs duty relief aims to reduce import dependence and strengthen domestic supply chains. - Aviation Manufacturing & MRO: Zero Duty on Components
Civil and defence aircraft manufacturing gets a boost through tariff exemptions on aircraft parts and maintenance, repair, and overhaul (MRO) materials. - Authorized Economic Operator (AEO) Benefits Extended
Budget 2026 extends the duty deferral period for AEO-certified importers from 15 days to 30 days. This import duty deferral benefit doubles the working capital relief for trusted traders.
₹10 Lakh Courier Export Limit Completely Removed
Budget 2026 removes the ₹10 lakh per-consignment cap on courier exports, a major benefit for small businesses, artisans, and e-commerce sellers. This customs rule change enables unlimited value exports through courier services.
Who Benefits:
- Handicraft exporters (Moradabad, Khurja, Sambhal, etc.)
- MSME textile & leather exporters
- Cross-border e-commerce sellers
- Startup exporters
- Artisans selling globally
FAQ: Questions Importers Actually Ask
When do the import duty changes take effect?
Baggage rules change on Feb 2. Personal goods duty cut takes effect April 1, 2026. Exemption removals happen Feb 2 & May 1.
How much will I save with the 50% import duty cut?
15-25% reduction in total landed cost (after accounting for IGST and surcharge), effective April 1, 2026.
Which items should I NOT buy before April 1
Non-urgent personal imports (electronics, jewelry, cameras, watches). Wait until April 1 for 50% duty cut. Avoid gaming consoles (getting pricier due to component duty).
Will the baggage allowance change affect my travel shopping?
Yes, significantly. Your duty-free limit increases ₹25,000 (50% higher), and excess items now face 10% duty instead of 20%.
Which sectors get the best import duty benefits?
Seafood (3% duty-free inputs), leather (extended to shoe uppers), capital goods (0% duty), nuclear/aviation (till 2035), and e-commerce (unlimited courier export).
Dipankar Biswas
With 20 years of experience in startups, mobile, commerce, social commerce, and fintech, I am the founder of EximPe, a B2B cross border payments and trade finance platform for SME exporters and importers.