Budget 2026: FM denies US role in customs duty cuts

New Delhi: Finance Minister Nirmala Sitharaman firmly stated that the customs duty reductions included in the Union Budget 2026–27 were driven by domestic economic priorities  such as boosting local manufacturing competitiveness and lowering input costs for exporters and not influenced by any U.S. trade issues or tariff deals.

In her post-budget remarks, Sitharaman emphasised that duty rationalisation is part of India’s broader strategy to strengthen manufacturing and supply chains within the country, rather than a response to external bilateral pressures.

Customs duty changes
The Budget included cuts and exemptions in customs duties on select capital goods, raw materials and inputs that feed into sectors like electronics and export-oriented industries aimed at reducing production costs and enhancing global competitiveness.

Government officials — including senior customs and indirect tax authorities have echoed the FM’s statement, clarifying that these duty rationalisations are aligned with long-term industrial priorities, not tied to any specific trade agreement with the United States.

Context around U.S.–India trade relations
Reports about U.S. tariff adjustments or reduced tariffs on some Indian exports surfaced around the same time as the Budget, leading to speculation that India’s duty cuts were a “response” to American decisions. However, both the Finance Ministry and customs authorities have denied any causal link between the U.S. actions and India’s Budget policy decisions.

Broader Budget narrative
Overall, the Union Budget 2026 focused on supporting manufacturing, exports, infrastructure investment and fiscal discipline, underlining that internal economic goals are the prime drivers behind duty measures