Budget 2026: Duty relief for exports to brave trade winds

To cushion the impact of the 50% US tariffs, the duty-free imports for certain inputs used in the export of processed marine products and leather or synthetic footwear -India's key exports -have been eased.

The budget has also allowed duty-free exports of fish catch in Exclusive Economic Zone and high seas.

For the processing seafood products segment, the limit will be increased to 3% from the current 1% of the free on board (FoB) value of the previous year's export turnover.


Moreover, the extension of the time-period for export of final product to one year from the existing six months for exporters of leather or textile garments, leather or synthetic footwear and other leather products, and enhanced focus on improving logistics through freight corridors, would aid the sector. "This gives exporters more time to ship orders, reduces working-capital stress, and lowers the risk of penalties," said an official.

The scope of duty-free inputs in footwear manufacturing is also expanded to include shoe uppers, not just finished footwear, easing input constraints for exporters.

The measures are crucial as Inda's leather and leather products shipments dipped marginally 0.23% to $3.3 billion in April-December FY26.

The government has also provided a special one-time measure to facilitate sales by eligible manufacturing units in Special Economic Zones (SEZ) to the domestic tariff area at concessional rates of duty. The quantity of such sales will be limited to a prescribed proportion of their exports.