Budget 2026: FM halves import duties for personal use to boost consumption amid tariff offensive

Finance Minister Nirmala Sitharaman has proposed a sharp cut in import tariffs on goods brought in for personal use in her ninth Union Budget 2026 speech. The FM proposed reducing the rate on all dutiable items from 20% to 10%. The move is aimed at easing costs for individuals and encouraging personal imports. 

The proposal comes at a time when India’s economy has shown resilience despite steep tariffs imposed by former US President Donald Trump. Economic growth is projected at 7.4% for the financial year ending March 31, supported by sustained government spending on infrastructure and a series of tax cuts on income and consumption that have boosted consumer demand. 

The Union Budget further proposes to revise provisions governing baggage clearance during international travel to address genuine concerns of passengers. The revised rules will enhance duty-free allowances and provide clarity in temporary carriage of goods brought in or taken out. Furthermore, the honest taxpayers will now be able to settle their dues and close cases by paying an additional amount in lieu of penalty, the Budget added.

Taking forward the weeding out of long continuing customs duty exemptions, the Budget proposes to remove certain exemptions on items which are being manufactured in India or where the imports are negligible. Similarly, to further simplify the process of ascertaining the rate of duty applicable on a particular item, the Budget proposes to incorporate certain effective rates in various customs notifications to the tariff schedule itself.

As expected, the Budget did not have any big bang announcements or personal tax changes as Sitharaman followed a fiscal consolidation roadmap and announced cross-sector reforms. A major announcement was the boost to public capital expenditure (capex) to Rs 12.2 lakh crore for FY 2026-27, up from Rs 11.2 lakh crore allotted last year.