The export-oriented sector is in focus, especially in the aftermath of the steep US tariffs and the recent FTAs that India has signed. All eyes are on the Budget 2026 and the possible steps that the Finance Minister could unveil to address the concerns of Indian exporters. The exporters are expecting a series of measures, including tax incentives, rationalisation of import duties, and support for branding and marketing initiatives in global markets.
The Federation of Indian Export Organisations (FIEO) suggested that the Budget should urgently address the problem of inverted customs duty structures, where import duties on raw materials, components, or intermediates are higher than those on finished goods.
The exporting community has also sought targeted policy and fiscal support for the development of global-scale shipping lines in the country, access to long-term finance, and viability gap funding.
Deloitte India said that the FY27 Budget should consider measures such as supporting MSMEs through export credit and concessional financing, as well as funding exploration of critical minerals to enhance trade resilience and reduce external vulnerabilities.
Deloitte Economist Rumki Majumdar said that rising global protectionism and ad hoc measures, such as tariff hikes, changes to rules of origin, and non-tariff barriers, are adding to the uncertainty for Indian exporters.
Import duty rationalisation
FIEO has recommended rationalisation of import duties on key inputs used by export-oriented industries so that input costs are aligned with finished product duties. For instance, it said, synthetic yarns and fibres attract higher customs duties than finished fabrics and garments, which adversely impacts the textile and apparel value chain.
Similarly, electronic components, such as printed circuit boards, connectors, and sub-assemblies, face higher duties compared to imported finished electronic products, discouraging domestic value addition.
In the chemical and plastics sector, basic raw chemicals and polymers often attract higher duties than downstream finished products, undermining Indian manufacturers.
Industry-specific expectations
The leather and footwear sector also faces higher duties on inputs such as components and accessories than on imported finished footwear, the apex exporters’ body said.
“Correcting these anomalies by lowering or restructuring duties on raw materials will reduce production costs, ease working capital pressures, encourage domestic manufacturing, and strengthen India’s export competitiveness,” FIEO President SC Ralhan said.
The Council for Leather Exports (CLE) has requested to reinstate basic customs duty exemption on the import of bovine crust and finished leathers. The council has also urged changes in the IGCR (Import of Goods at Concessional Rate of Duty) scheme.
Ralhan said India’s heavy dependence on foreign shipping lines exposes exporters to high freight costs, supply disruptions, and volatility in global shipping rates. FIEO has proposed extending the 15 per cent concessional corporate tax rate for new domestic manufacturing units for at least another five years.
Apex apparel exporters’ body AEPC has also sought fiscal incentives, including scrips and an increase in the interest subsidy rate for loans in the Budget, to help the sector tide over US tariff shocks.
Similarly, the sports goods industry has recommended a cut in import duty on willow (used to make bats) and cane.
Kolkata-based seafood exporter and MD of Megaa Moda, Yogesh Gupta, said the Budget proposed a feed subsidy in the same vein as the fertiliser subsidy, rationalisation of RoDTEP (Remission of Duties and Taxes on Exported Products) rates, and timely tax refunds.