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Ministry of Finance | Central Board of Indirect Taxes and Customs (CBIC) | Department of Commerce
In the Union Budget 2026-27, the Government introduced a comprehensive suite of reforms to modernize trade and simplify the global interface. A central feature is “Tariffisation,” incorporating effective duty rates directly into the First Schedule of the Customs Tariff Act, 1975, to reduce complexity and align with international standards. This includes a review of 124 conditional exemptions, where 22 redundant entries are being lapsed to prioritize domestic capacity.
Digital Transformation and Facilitation The budget transitions toward a faceless, trust-based Customs environment:
SWIFT 2.0: A unified platform integrating 63 Partner Government Agencies (PGAs). Key agencies like FSSAI and CDSCO are targeted for complete integration by March 31, 2026, to reduce redundant manual follow-ups.
Customs Integrated System (CIS): A unified AI-assisted platform for all transport modes (sea, air, land, courier, post) featuring real-time dashboards and automated data entry.
Deferred Duty Payment: The payment cycle is extended from 15 to 30 days. A new class of “Eligible Manufacturer Importers” has been introduced to improve working capital for domestic units.
Automated Clearance: Facilities like “Auto Goods Registration” and “Auto Let Export Order” (Auto LEO) now enable system-driven clearance for e-sealed cargo and eligible entities without manual intervention.
Citizen and E-Commerce Modernization To address present-day travel realities and digital trade, the government is rationalizing baggage and export rules:
Baggage Rules 2026: Duty-free allowances for Indian residents/tourists are increased to ₹75,000, and for foreign origin tourists to ₹25,000. Jewellery allowances are now based solely on weight (40g for females, 20g for others), removing outdated value caps.
E-Commerce Exports: The ₹10 lakh value cap on courier exports will be removed starting April 1, 2026, to help MSMEs scale global sales. A new “Returns and Rejects” framework will handle the high 20-25% return rate of online trade without treating them as fresh imports for duty.
What is the “Tariffisation” exercise introduced in the 2026-27 Customs Reforms? Tariffisation is a simplification measure where effective customs duty rates—previously governed by various individual notifications—are now formally incorporated into the First Schedule of the Customs Tariff Act. This ensures that trade stakeholders can ascertain applicable duty rates from a single legislative source, enhancing legal certainty and addressing global concerns regarding India’s complex tariff structure.
Policy Relevance
The 2026-27 reforms signify a strategic pivot toward technology-led governance.
Empowering the Blue Economy: Amending the Customs Act to extend jurisdiction beyond territorial waters allows for duty-free landing of fish caught by Indian-flagged vessels in the EEZ and High Seas, boosting food security.
Health and Social Relief: Providing BCD exemptions on 17 life-saving cancer drugs (e.g., Ribociclib, Venetoclax) and expanding the rare disease list directly lowers out-of-pocket medical expenditure.
Manufacturing Incentives: Targeted duty exemptions for capital goods in lithium-ion cell manufacturing, aircraft parts for defense MRO, and critical components for microwave ovens support India’s “Viksit Bharat” manufacturing targets.
Compliance and Predictability: Increasing the validity of Advance Rulings from three to five years and re-characterizing voluntary penalties as a “charge for non-payment” reduces reputational risks and supports long-term business planning.
Relevant Question for Policy Stakeholders: How can the CBIC leverage the data from “Auto Out of Charge” facilities and Body Worn Camera recordings to establish a performance-linked dashboard for customs houses that consistently achieve the fastest cargo release times?
Follow the full news here: 2026-27 Customs Reforms