The Union Budget 2026-27, presented by Finance Minister Nirmala Sitharaman in Parliament on Sunday, February 1, has introduced several tax and duty changes. These changes will affect consumer prices across sectors, offering relief in some areas while increasing costs in others.
On the positive side, the budget has reduced or exempted customs duties on various products to encourage domestic manufacturing, lower input costs, and help households and businesses. Items that may become more affordable include imported personal use goods, smartphones and electronic components, solar panels and lithium-ion battery parts, leather products and footwear, microwave ovens, and other consumer electronics. Duty exemptions on certain aircraft components and sports equipment could lower costs for the aviation and leisure sectors.
Healthcare is also likely to benefit. The budget has removed basic customs duty on 17 cancer drugs and several medicines for rare diseases, lowering costs for patients and caregivers. Travel and education abroad may also become cheaper, with reduced tax collected at source (TCS) rates for overseas tour packages and foreign education remittances under the Liberalised Remittance Scheme (LRS).
On the other hand, many goods are expected to see higher costs under the new fiscal rules. This includes alcohol and tobacco products, where increased duties will likely lead to higher retail prices. Certain industrial categories and imported equipment, such as coffee roasting and vending machines, have had duty exemptions removed, making them pricier. Pricing pressures could also develop in sectors tied to fertilizer raw materials. Some higher-end imported electronics and filmmaking gear may face increased duties.
Beyond these direct price impacts, changes in market-related taxes, such as higher securities transaction tax (STT) on derivatives and changes to tax on future and options trading, may affect costs and returns for investors.
Overall, the budget’s adjustments in customs and indirect taxes show a mix of targeted relief, particularly in healthcare, clean energy, and electronics. This is balanced with strategic revenue measures that could make certain luxury or imported goods more expensive.
