India is considering a fresh set of policy measures in the Union Budget 2026 aimed at reducing import dependence and narrowing the country’s trade deficit, according to officials familiar with the discussions.
The proposed steps are expected to focus on sectors where imports remain high despite domestic manufacturing initiatives, including electronics, critical minerals, chemicals and select engineering goods. The government is weighing calibrated tariff adjustments, tighter quality control norms and non-tariff measures to encourage local production without disrupting supply chains.
Officials said the budget may also strengthen incentives under the Production-Linked Incentive (PLI) schemes and align customs policies more closely with the “Make in India” and “Atmanirbhar Bharat” goals. Enhanced support for export-oriented manufacturing and value-added exports is also under consideration to offset import curbs.
India’s merchandise trade deficit has remained elevated amid strong domestic demand and global price volatility, prompting policymakers to seek a balance between protecting local industry and maintaining competitiveness. Any new barriers are likely to be targeted and WTO-compliant, with a focus on long-term industrial capacity building rather than broad-based protectionism.
The Union Budget 2026 is scheduled to be presented early next year and is expected to outline the government’s medium-term trade and industrial strategy.
