Budget 2026: Boost for civil & defence aviation as FM exempts customs duty on aircraft components
Union Budget 2026: The proposal also extends duty exemptions to raw materials imported for manufacturing aircraft parts used in maintenance, repair and overhaul (MRO) activities by units in the defence sector.
- Feb 1, 2026,
- Updated Feb 1, 2026 2:11 PM IST
In a major push to strengthen India’s aviation ecosystem, Union Finance Minister Nirmala Sitharaman in her Union Budget 2026 speech has proposed to exempt basic customs duty (BCD) on components and parts required for the manufacture of civilian, training and other aircraft. The proposal also extends duty exemptions to raw materials imported for manufacturing aircraft parts used in maintenance, repair and overhaul (MRO) activities by units in the defence sector.
Follow live coverage on Union Budget 2026 here
Presenting the Budget in Parliament, Finance Minister Nirmala Sitharaman announced that the government will exempt basic customs duty on components and parts needed for the manufacture of civilian training aircraft and other civilian aircraft. The step is aimed at boosting India’s aviation manufacturing ecosystem and lowering reliance on imported equipment.
Alongside this, the government unveiled a parallel relief for the defence sector, proposing to waive basic customs duty on raw materials imported for producing aircraft parts used in maintenance, repair and overhaul (MRO) activities, as well as other operational needs of defence units.
The move is aimed at reducing input costs, encouraging domestic manufacturing, and supporting the growth of India’s MRO capabilities. By easing import duties on critical inputs, the government hopes to enhance self-reliance in both civil and defence aviation while making India a more competitive hub for aircraft manufacturing and servicing.
The Union Budget has proposed raising the duty-free import limit for select seafood processing inputs — from 1% to 3% of the Free On Board (FOB) value. It also plans to allow duty-free imports of specified inputs for leather exports.
In addition, the government may extend basic customs duty exemptions on capital goods used in Battery Energy Storage Systems, and has proposed exemptions for sodium antimonate, a key material in solar glass production.
Customs duty exemptions on imports for nuclear power projects are also set to continue until 2035.
Track live Budget updates, breaking news, expert opinions and in-depth analysis only on BusinessToday.in
In a major push to strengthen India’s aviation ecosystem, Union Finance Minister Nirmala Sitharaman in her Union Budget 2026 speech has proposed to exempt basic customs duty (BCD) on components and parts required for the manufacture of civilian, training and other aircraft. The proposal also extends duty exemptions to raw materials imported for manufacturing aircraft parts used in maintenance, repair and overhaul (MRO) activities by units in the defence sector.
Follow live coverage on Union Budget 2026 here
Presenting the Budget in Parliament, Finance Minister Nirmala Sitharaman announced that the government will exempt basic customs duty on components and parts needed for the manufacture of civilian training aircraft and other civilian aircraft. The step is aimed at boosting India’s aviation manufacturing ecosystem and lowering reliance on imported equipment.
Alongside this, the government unveiled a parallel relief for the defence sector, proposing to waive basic customs duty on raw materials imported for producing aircraft parts used in maintenance, repair and overhaul (MRO) activities, as well as other operational needs of defence units.
The move is aimed at reducing input costs, encouraging domestic manufacturing, and supporting the growth of India’s MRO capabilities. By easing import duties on critical inputs, the government hopes to enhance self-reliance in both civil and defence aviation while making India a more competitive hub for aircraft manufacturing and servicing.
The Union Budget has proposed raising the duty-free import limit for select seafood processing inputs — from 1% to 3% of the Free On Board (FOB) value. It also plans to allow duty-free imports of specified inputs for leather exports.
In addition, the government may extend basic customs duty exemptions on capital goods used in Battery Energy Storage Systems, and has proposed exemptions for sodium antimonate, a key material in solar glass production.
Customs duty exemptions on imports for nuclear power projects are also set to continue until 2035.
Track live Budget updates, breaking news, expert opinions and in-depth analysis only on BusinessToday.in