Ahead of the Union Budget for 2026–27, exporters on Thursday urged the government to announce a series of measures aimed at boosting outbound shipments, including rationalisation of import duties, fiscal support for branding and marketing initiatives, and targeted assistance for domestic shipping lines.
Finance Minister Nirmala Sitharaman is scheduled to present the Union Budget on February 1, and the export community has flagged several structural challenges that need urgent policy intervention.
A key concern highlighted by exporters is the inverted customs duty structure, where import duties on raw materials, components, and intermediates are higher than those on finished goods. Industry bodies warned that this anomaly erodes the competitiveness of Indian manufacturers in global markets.
The Federation of Indian Export Organisations (FIEO) has recommended rationalisation of import duties on inputs used by export-oriented industries to ensure alignment with finished products. It pointed out that synthetic yarns and fibres attract higher duties than finished fabrics, adversely affecting the textile and apparel value chain.
Similarly, in the electronics sector, components such as printed circuit boards, connectors and sub-assemblies face higher import duties than finished electronic products, discouraging domestic value addition. The chemicals and plastics industry also suffers as basic raw chemicals and polymers attract higher duties than finished products, undermining Indian manufacturers. The footwear sector faces comparable challenges, with higher duties on components and accessories vis-à-vis imported finished footwear.
Exporters have also sought policy and fiscal support for the development of Indian shipping lines, including access to long-term finance and viability gap funding, amid ongoing supply chain disruptions and volatility in global shipping rates.
FIEO has further proposed extending the 15 per cent concessional corporate tax rate for new domestic manufacturing units for at least another five years to encourage investment and capacity expansion.
The Apparel Export Promotion Council (AEPC) has called for fiscal incentives such as export scrips and enhanced interest subsidy rates on loans to help the sector cope with external pressures, particularly higher tariffs imposed by the US. AEPC Chairman A. Sakthivel also suggested a reduction in GST rates on textile machinery and the introduction of a technology upgradation scheme for micro units.
The Indian apparel sector is currently facing an exceptionally challenging environment, marked by high inventory levels in key markets like the US, prolonged geopolitical disruptions, and weakened demand sentiment. A 50 per cent tariff imposed by the US on Indian goods since August has further disrupted exports to India’s largest export destination.
The Council for Leather Exports (CLE) has requested the reinstatement of basic customs duty exemption on bovine crust leather and finished leathers, along with changes to the Import of Goods at Concessional Rate of Duty (IGCR) scheme.
The sports goods industry has recommended a reduction in import duty on willow, a critical raw material used for manufacturing cricket bats and other sports equipment.
Seafood exporter and Managing Director of Megaa Moda, Yogesh Gupta, said the Budget should consider measures similar to the fertiliser subsidy model, along with rationalisation of RoDTEP (Remission of Duties and Taxes on Exported Products) rates and timely refunds of taxes.
Professional services firm Deloitte India said the Budget should focus on supporting MSMEs through export credit and financing, while also funding the exploration of critical minerals to strengthen India’s trade resilience and reduce external vulnerabilities.
Economist Rumki Majumdar noted that rising global protectionism—through ad-hoc tariff hikes, frequent changes in rules of origin, and increasing non-tariff barriers—has added significant uncertainty for Indian exporters, making policy stability and targeted support crucial in the coming fiscal year.
