Budget – Manish Tewari Raises Questions Over Customs Duty Cuts in Budget 2026–27

Budget –Congress MP Manish Tewari on Monday raised concerns over the Union Budget 2026–27, questioning whether recent customs duty reductions amount to indirect concessions to the United States without the backing of a formal bilateral agreement. His remarks come amid a series of tariff changes announced through the Finance Bill that appear to benefit sectors long highlighted in trade discussions between India and the US.

Tewari shared his views on social media platform X, pointing to what he described as an unusual pattern in the way customs duties have been revised. According to him, the absence of a clear policy explanation in the Budget speech, coupled with multiple reductions implemented through notifications and rate alignments, calls for closer scrutiny.

Questions Over Policy Direction in the Finance Bill

In his post, the senior Congress leader argued that the Finance Bill 2026 lacks a coherent narrative explaining the rationale behind widespread customs duty exemptions and reductions. He noted that changes were introduced through chapter-wise tariff rationalisation and notifications, rather than being clearly articulated as part of a broader trade or industrial strategy.

Tewari suggested that this approach makes it difficult to assess whether the duty changes are driven by domestic priorities or external trade pressures. He questioned whether these moves align with the interests of the United States and, if so, whether India has secured corresponding commitments in return.

Sectors Benefiting From Duty Reductions

Highlighting specific industries, Tewari observed that the sectors gaining from the revised customs duties closely mirror areas that have featured repeatedly in US trade representations. These include electronics and electronic components, semiconductors and related capital goods, medical devices, select chemicals and intermediates, civil aviation parts, and clean energy inputs.

He pointed out that many of these sectors have previously been cited by the Office of the United States Trade Representative as points of concern in bilateral trade engagements. The overlap, he argued, raises the question of whether the Budget reflects unilateral concessions rather than negotiated outcomes.

Budget Presentation and Broader Fiscal Measures

The Union Budget 2026–27 was presented in the Lok Sabha a day earlier by Finance Minister Nirmala Sitharaman, marking her ninth consecutive Budget. Alongside customs duty adjustments, the Budget introduced several changes affecting consumers, travellers, and key industries.

One notable announcement was the sharp reduction in tax collected at source on overseas tour packages. The rate has been brought down to 2 per cent from the earlier structure that ranged between 5 and 20 per cent, and the levy will now apply without any minimum transaction threshold.

Focus on Clean Energy and Strategic Sectors

As part of its clean energy push, the government has exempted customs duty on sodium antimonate, an essential raw material used in the manufacture of solar glass. The move is intended to support domestic production and reduce input costs for renewable energy projects.

In addition, customs duty exemptions for nuclear power projects have been extended until 2035, irrespective of plant capacity. This measure underscores the government’s long-term approach to energy security and infrastructure development.

Support for Aviation and Consumer Electronics

The Budget also offers relief to the civil aviation sector by providing basic customs duty exemptions on components and parts, including engines, used in the manufacture of civilian aircraft. This is expected to lower production costs and encourage manufacturing activity in the aerospace segment.

Similarly, specified parts used in the manufacture of microwave ovens have been exempted from customs duty, a step aimed at boosting value addition and domestic assembly in consumer electronics.

Changes for International Travellers

International travellers stand to benefit from a simplified baggage regime. Customs duty on all dutiable goods imported for personal use has been reduced from 20 per cent to 10 per cent. Announcing the change, the Finance Minister said the revision is intended to rationalise the customs duty structure and make it more user-friendly.

While the government has framed these measures as part of its broader economic and industrial objectives, opposition leaders like Tewari have called for greater transparency on the strategic intent behind the tariff changes, particularly in the context of international trade relations.