UNION BUDGET 2026-27: What Gets Cheaper, What Gets Costlier—Complete Breakdown

Finance Minister Nirmala Sitharaman’s presentation of the Union Budget 2026-27 marks a strategic pivot toward growth acceleration, inclusive development, and targeted relief for consumers and businesses. Against the backdrop of projected GDP growth of 6.8-7.2% for FY27, the Budget emphasizes boosting middle-class spending power while maintaining fiscal discipline.

The budget introduces a nuanced approach: significant duty cuts and tax rationalizations benefiting consumers, exporters, and strategic sectors, while implementing measured increases targeting high-risk trading activities and ensuring tax compliance. This article provides a detailed analysis of the measures that reduce costs and those that increase them.

WHAT GETS CHEAPER IN UNION BUDGET 2026-27

Consumer Relief Measures

The Budget prioritizes household financial relief through strategic duty reductions and tax rate cuts addressing everyday expenses, travel, and healthcare.

1. OVERSEAS TRAVEL & TOURISM

Overseas Tour Package Tax Relief

Current Situation:

• Tax Collected at Source (TCS) on overseas tour packages: 5-20%
• Inconsistent rates creating compliance complexity
• Burden on travel intermediaries and consumers

Budget Change:

• New Uniform Rate: 2% TCS
• Applicable to: All overseas tour program packages
• No Amount Stipulation: Full coverage across all price points

Impact & Benefit:

• Significant cost reduction for international travelers
• Approximately 60-90% reduction in tax burden
• Enhanced affordability of global tourism
• Boost to travel industry revenues
• Stimulus for foreign exchange earnings

Consumer Example:

• ₹1 lakh tour package: ₹1,000-2,000 TCS (from ₹5,000-20,000)
• Family vacation cost reduction: 5-20% savings on tour packaging

Business Benefit:

• Travel agents and tour operators face lower compliance burden
• Simplified rate structure
• Increased customer demand from lower costs

2. FOREIGN EDUCATION & MEDICAL EXPENSES

Liberalized Remittance Scheme (LRS) Rate Reduction

Current Situation:

• TDS on education remittances: 5%
• TDS on medical remittances: 5%
• Creates friction in overseas education and treatment access

Budget Change:

• New Uniform Rate: 2% TDS
• Scope: Both education and medical-related remittances
• Applicability: All LRS remittances for these purposes

Impact & Benefit:

• 60% reduction in TDS burden
• Enhanced affordability of quality international education
• Better access to world-class medical treatment
• Support for youth skill development abroad
• Medical tourism facilitation

Consumer Impact:

• ₹25 lakh education remittance: ₹12,500 TDS (from ₹25,000)
• ₹10 lakh medical treatment: ₹5,000 TDS (from ₹10,000)
• Annual savings for families pursuing overseas education/healthcare

Strategic Outcome:

• Positions India competitively for retaining talent pursuing higher education
• Improves healthcare accessibility for complex medical conditions

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3. PERSONAL GOODS IMPORTS

Personal Use Imports Customs Duty Reduction

Current Situation:

• Basic Customs Duty on personal-use imports: 20%
• Affects returning travelers, expatriates, and gift receivers
• Significant cost burden on international parcels

Budget Change:

• New Rate: 10% BCD on all dutiable personal-use goods
• 50% Reduction: Halves the customs duty load
• Universal Application: All categories of personal-use imports

Impact & Benefit:

• Direct cost savings for international parcel receivers
• Enhanced affordability of imported consumer goods
• Support for diaspora maintaining connections with relatives
• Increased international e-commerce participation
• Relief for expatriate communities

Consumer Example:

• ₹10,000 imported gadget: ₹1,000 duty (from ₹2,000)
• ₹50,000 electronic equipment: ₹5,000 duty (from ₹10,000)
• 50% savings on personal imports across categories

Sectoral Impact:

• E-commerce platforms benefit from reduced import costs
• International gift giving becomes more affordable
• Courier services experience demand boost

Healthcare & Life-Saving Medicines

The Budget prioritizes healthcare accessibility through comprehensive medicines exemptions.

4. CANCER DRUGS DUTY EXEMPTION

Critical Healthcare Relief

Scope:

• 17 major cancer-treating drugs and medicines
• Basic Customs Duty: Fully Exempted
• Applicability: All import channels

Affected Drugs:

• Targeted cancer therapies
• Chemotherapy agents
• Immunotherapy medications
• Biosimilar cancer treatments

Impact & Benefit:

• Eliminates import cost barriers for cancer treatment
• Significantly reduces treatment burden on patients
• Improves medication affordability and accessibility
• Supports cancer care infrastructure development
• Humanitarian focus on vulnerable patient populations

Patient Impact:

• Cancer drug prices: 10-30% reduction through import duty elimination
• Treatment accessibility: Enhanced for economically weaker sections
• Annual cost savings: ₹1-5 lakh per patient (depending on drug)

Healthcare System Benefit:

• Reduces burden on public healthcare budgets
• Encourages private sector investment in oncology
• Aligns with universal healthcare aspirations

5. RARE DISEASE MEDICINES EXPANSION

Widened Access to Rare Disease Treatments

Program Enhancement:

• Previous Coverage: Select rare diseases
• New Addition: 7 additional rare diseases
• Scope: Personal imports of drugs, medicines, FSMP (Food for Special Medical Purposes)

Exemption Scope:

• Basic Customs Duty: Fully exempted
• Applicable to: All imported rare disease medications
• Coverage: Diagnostic foods and specialized nutritional products

New Diseases Covered:

• Specific genetic disorders
• Metabolic disorders
• Neurological conditions
• Inherited diseases
• Complex systemic disorders

Impact & Benefit:

• Extends rare disease treatment access to more patient populations
• Reduces financial barriers to specialized medications
• Encourages medical tourism for rare disease treatment
• Supports patient advocacy and disease awareness
• Improves quality of life for rare disease patients

Economic Impact:

• Rare disease treatment costs: 20-50% reduction through duty exemption
• Patient families: Significant financial relief from medical expenses
• Healthcare outcomes: Enhanced treatment options and accessibility

Manufacturing & Export Promotion

Strategic duty reductions supporting domestic manufacturing competitiveness and export growth.

6. SEAFOOD EXPORT INPUT DUTY REDUCTION

Enhanced Input Import Facility

Program:

• Duty-Free Imports Scheme for seafood processing inputs
• Expansion of existing facility

Current Limits:

• Maximum Import Allowance: 1% of FOB (Free on Board) value of previous year’s export turnover
• Specified inputs only

Budget Enhancement:

• New Limit: 3% of FOB value
• 300% Increase: Tripled input import capacity
• Applicability: All specified inputs for seafood processing exports

Affected Input Categories:

• Processing chemicals and additives
• Packaging materials
• Quality assurance inputs
• Food safety compliance materials

Impact & Benefit:

• Enhanced production capacity for seafood exporters
• Improved cost competitiveness in global markets
• Increased export volumes and foreign exchange earnings
• Support for coastal state economies
• Fisheries sector growth acceleration

Exporter Impact:

• Production costs: 5-10% reduction through increased duty-free input allowance
• Export competitiveness: Improved pricing in global seafood markets
• Margin expansion: Enhanced profitability for seafood processors

Economic Outcome:

• India’s seafood export growth: Projected 15-20% increase
• Employment in fisheries sector: Significant job creation
• Coastal region development: Enhanced economic opportunities

7. LEATHER PRODUCTS EXPORT EXPANSION

Shoe Uppers Duty-Free Import Access

Previous Structure:

• Duty-Free Inputs: Available for leather/synthetic footwear exports only
• Gap: Shoe uppers (key intermediate product) excluded

Budget Change:

• Extension: Duty-Free imports now apply to Shoe Uppers exports
• Scope: All specified inputs used in shoe uppers manufacturing
• Applicability: Full production value chain for shoe upper exports

Extended Export Timeline:

• Previous Allowance: 6 months from initial export clearance
• New Allowance: 1 year from clearance date
• Applicable Products: Leather/textile garments, leather/synthetic footwear, leather products

Impact & Benefit:

• Expanded product coverage for export duty support
• Longer supply chain management window
• Enhanced operational flexibility for exporters
• Increased export value-addition
• Competitive pricing in global leather markets

Exporter Impact:

• Input costs: 10-15% reduction for shoe uppers manufacturers
• Production timeline: Extended 1-year window improves supply chain management
• Export volumes: Anticipated 20-25% growth in leather product exports

Sectoral Impact:

• Leather industry: Enhanced global competitiveness
• Employment: Significant job creation in leather processing
• Regional development: Tamil Nadu, Karnataka, Punjab leather clusters

8. MINERALS & MINERAL PRODUCTS

Scrap & Minerals Customs Duty Rationalization

Affected Categories:

• Alcoholic liquor
• Scrap materials
• Minerals
• Tendu leaves

Rate Changes:

Alcoholic Liquor, Scrap & Minerals:

• Current Rate: Variable (5%-20%)
• New Rate: 2% Unified Customs Duty
• Rationalization: Simplified structure

Tendu Leaves (Special Rate Reduction):

• Current Rate: 5% Customs Duty
• New Rate: 2% Customs Duty
• Reduction: 60% rate cut

Impact & Benefit:

• Simplified tariff structure reducing compliance complexity
• Lower raw material costs for dependent industries
• Enhanced export competitiveness for mineral-based products
• Support for tribal communities dependent on tendu leaf collection
• Cost reduction across mineral-dependent manufacturing sectors

Industry Impact:

• Scrap metal processors: 10-20% cost reduction in raw materials
• Mineral-dependent industries: Improved competitiveness
• Tendu leaf-dependent industries: Enhanced profitability

Energy & Strategic Infrastructure

9. RENEWABLE ENERGY EQUIPMENT

Energy Transition Support Duties Exemption

Lithium-Ion Battery Manufacturing:

Current Exemption: Capital goods for Lithium-Ion Cell manufacturing Budget Extension: Also include battery energy storage systems (BESS) manufacturing

Exemption Scope:

• Basic Customs Duty: Fully exempted
• Applicable to: All capital equipment for BESS production
• Equipment Types: Storage cells, integration systems, testing apparatus

Solar Glass Manufacturing:

Input Support: Sodium antimonate (solar glass manufacturing input) Exemption: Basic Customs Duty on import Benefit: Reduces solar glass production costs

Impact & Benefit:

• Renewable energy equipment costs: 15-25% reduction
• Solar manufacturing: Enhanced competitiveness
• Battery storage ecosystem: Rapid development support
• Clean energy transition acceleration
• Domestic battery and storage manufacturing growth

Strategic Impact:

• India’s renewable energy expansion: Facilitated through cost reduction
• Energy security: Enhanced through domestic battery production
• Global climate commitments: Supported through manufacturing incentives

10. NUCLEAR POWER SECTOR SUPPORT

Nuclear Equipment & Materials Duty Exemption

Program Enhancement:

• Current Exemption: Capital goods for Nuclear Power Projects (limited timeline and capacity)
• Budget Expansion:
  • Timeline Extended: Till year 2035 (long-term certainty)
  • Scope Expanded: All nuclear plants irrespective of capacity

Exemption Scope:

• Basic Customs Duty: Fully exempted on all nuclear project capital goods
• Applicability: All nuclear power plants across capacities
• Equipment Types: Reactor components, safety systems, infrastructure

Impact & Benefit:

• Nuclear power expansion: Cost-reduced, long-term support
• Energy security: Enhanced through nuclear capacity additions
• Climate goals: Supported through clean energy infrastructure
• Technology investment: Attracted through duty exemption certainty
• Employment: Job creation in nuclear sector and manufacturing

Economic Impact:

• Nuclear plant construction costs: 8-12% reduction through duty exemptions
• India’s nuclear capacity: Projected growth supported
• Foreign investment: Attracted through long-term certainty

11. CRITICAL MINERALS PROCESSING

Capital Goods Import Duty Exemption

Strategic Focus: Domestic processing of critical minerals

Exemption Scope:

• Capital goods: Required for critical minerals processing in India
• Basic Customs Duty: Fully exempted
• Applicability: All mineral processing equipment imports

Strategic Minerals Covered:

• Rare earth elements
• Lithium and battery minerals
• Strategic metals
• Industrial minerals

Impact & Benefit:

• Domestic processing establishment: Encouraged through cost reduction
• Import dependency: Reduced through local processing capacity
• Value-addition: Enhanced through domestic processing investment
• Supply chain resilience: Built through local mineral ecosystem
• Employment: Job creation in mineral processing sector

Economic Impact:

• Processing equipment costs: 20-25% reduction
• Domestic processing capacity: Rapid expansion enabled
• Mineral export value: Enhanced through value-addition

Aerospace & Manufacturing

12. CIVILIAN AIRCRAFT MANUFACTURING

Aircraft Components Duty Exemption

Scope:

• Components and parts: For civilian, training, and other aircraft manufacturing
• Basic Customs Duty: Fully exempted
• Applicability: All aircraft types (commercial, training, cargo)

Equipment Coverage:

• Airframe components
• Avionics systems
• Propulsion components
• Interior components

Impact & Benefit:

• Aircraft manufacturing costs: 10-15% reduction
• Aviation industry development: Cost-incentivized growth
• Maintenance & repair ecosystem: Established through components availability
• Aviation manufacturing: Emerging sector supported

13. DEFENCE AIRCRAFT MAINTENANCE

MRO Sector Support

Raw Materials: For maintenance, repair, overhaul (MRO) of defence aircraft

Exemption Scope:

• Basic Customs Duty: Fully exempted on MRO-related imports
• Beneficiary: Defence sector units
• Equipment Types: Replacement parts, service materials, consumables

Impact & Benefit:

• Defence aircraft MRO costs: 15-20% reduction
• Maintenance capability: Enhanced for defence forces
• Operational readiness: Improved through cost-effective maintenance
• Self-reliance: Supported through domestic MRO capability

14. CIVILIAN ELECTRONICS & APPLIANCES

Microwave Oven Manufacturing

Component Support:

• Specified parts: Used in microwave oven manufacturing
• Basic Customs Duty: Fully exempted
• Strategic Goal: Deepen consumer electronics value-addition

Impact & Benefit:

• Microwave oven manufacturing costs: 8-12% reduction
• Consumer electronics sector: Cost-competitiveness enhanced
• Domestic manufacturing: Incentivized through duty exemption
• Consumer prices: Downstream cost reduction potential

Trade & Export Facilitation

15. FISHERIES SECTOR EXPANSION

Marine Resources Economic Maximization

Exclusive Economic Zone (EEZ) & High Seas

Current Limitation: Limited support for fish caught beyond territorial waters

Budget Enhancement:

Duty-Free Fish Catch:

• Scope: Fish caught in EEZ or High Seas by Indian fishing vessels
• Customs Duty: Fully exempted
• Applicability: All fish species caught outside territorial waters

Export Classification:

• Fish landed on foreign ports: Treated as goods export
• Export benefits: All export incentives applicable
• Trade benefits: Standard export procedures followed

Safeguards:

• Catch verification: Anti-misuse mechanisms
• Transit monitoring: Transshipment compliance
• Regulatory oversight: Prevention of illegal catch

Impact & Benefit:

• Fisheries sector revenue: Significant enhancement
• Fishermen income: 15-25% increase from expanded EEZ access
• Foreign exchange earnings: Increased through fish exports
• Global seafood markets: Enhanced Indian participation
• Coastal employment: Expanded opportunities for fishing communities

Economic Impact:

• High seas fish catch: Economically viable through duty exemption
• Export competitiveness: Enhanced pricing power
• Fisheries GDP contribution: Projected growth

16. E-COMMERCE EXPORT SUPPORT

Courier Exports Value Cap Removal

Current Limitation:

• Value Ceiling: ₹10 lakh per consignment
• Restriction: Limits small business and artisan export capacity
• Constraint: Prevents scaling of cross-border e-commerce

Budget Change:

• New Limit: NO LIMIT (Complete removal)
• Applicability: All e-commerce courier exports
• Beneficiaries: Small businesses, artisans, start-ups

Additional Measure:

• Rejected/Returned Consignments: Technology-enabled handling
• Identification: Advanced systems for tracking returns
• Processing: Efficient procedures for returned goods

Impact & Benefit:

• Small business export capacity: Unlimited growth potential
• Artisan global market access: Significantly enhanced
• Start-up e-commerce: Scaling friction removed
• Cross-border e-commerce: Facilitation and growth support
• MSMEs: Global market participation enabled

Economic Impact:

• E-commerce exports: Projected 100%+ growth
• Small business revenue: Significant expansion opportunity
• Global market penetration: Enhanced for Indian products
• Employment: Job creation in e-commerce logistics

Consumer & Business Benefit:

• Global reach: Indian artisans and small businesses access worldwide customers
• Competitive advantage: Unrestricted export capacity
• Revenue growth: Unlimited scaling opportunity

Nuclear & Strategic Sectors

17. NUCLEAR POWER GOODS

Nuclear Equipment & Materials Support

Scope:

• All goods required for nuclear power projects
• Exemption: Basic Customs Duty
• Duration: Extended through 2035

Strategic Benefit:

• Nuclear sector development: Cost-supported expansion
• Energy security: Enhanced through nuclear capacity
• Climate goals: Supported through clean energy infrastructure

WHAT GETS COSTLIER IN UNION BUDGET 2026-27

Tax Compliance & Penalty Increases

While the Budget emphasizes relief measures, it also implements targeted increases to address non-compliance and speculative trading.

1. INCOME TAX MISREPORTING PENALTY

Enhanced Penalty for Intentional Misreporting

Current Framework:

• Underreporting immunity: Available with tax payment framework
• Misreporting: Previously subject to different penalty structure

Budget Change:

Penalty Enhancement:

• Penalty Rate: 100% of tax amount (as additional income tax)
• Applicability: Cases of income/asset misreporting
• Calculation: Over and above regular tax and interest due

Mechanism:

• Taxpayer must pay: Full tax + Interest + 100% penalty (as additional income tax)
• Immunity: Both penalty immunity and prosecution immunity available
• Purpose: Encourage voluntary disclosure while maintaining deterrence

Scope of Misreporting:

• Intentional misclassification of income
• False asset valuations
• Incorrect deduction claims
• Deliberately wrong expense reporting

Impact & Disincentive:

• Effective tax rate doubling: Creates strong deterrence
• Voluntary disclosure: Encouraged through immunity framework
• Compliance: Enhanced through penalty increase
• Tax integrity: Improved through stronger enforcement

Taxpayer Impact:

• Misreported ₹10 lakh income: Additional ₹10 lakh penalty (beyond base tax)
• Effective consequence: Doubles tax liability plus interest
• Behavior change: Incentivizes accurate initial reporting

2. NON-DISCLOSURE OF MOVABLE ASSETS

Penalty Introduction for Undisclosed Personal Assets

Current Situation:

• Non-immovable foreign assets <₹20 lakh: No penalty
• Recently expanded: Prosecution immunity also provided

New Penalty:

• Movable Assets: Now attract penalties for non-disclosure
• Applicability: Undisclosed personal movable property
• Asset Types: Jewelry, vehicles, financial instruments, art, collectibles

Penalty Structure:

• Rate: Proportional to asset value
• Additional Tax: Levied as additional income tax
• Enforcement: Triggered during income tax assessments

Impact:

• Asset declaration: Incentivized through penalty risk
• Tax compliance: Improved for personal asset reporting
• Hidden wealth: Increased visibility to tax authorities
• Revenue: Incremental from asset-related tax compliance

Taxpayer Impact:

• Undisclosed jewelry worth ₹50 lakh: Subject to penalty and back taxes
• Behavioral change: Enhanced asset disclosure in tax returns
• Compliance burden: Increased documentation requirements

Rationale:

• Tax integrity: Ensures complete asset visibility
• Wealth taxation: Improves effectiveness through comprehensive asset reporting
• Black money: Reduces through disclosure requirements

Securities Trading Taxes

3. SECURITIES TRANSACTION TAX (STT) INCREASES

Enhanced STT on Derivatives Market

Strategic Purpose:

• Derivatives market speculation: Address excessive volatility
• Trading volume: Moderate through cost increase
• Market stability: Enhance through reduced speculative activity

Futures STT Increase:

Current Rate: 0.02% STT on futures New Rate: 0.05% STT Increase: 150% (2.5x increase)

Impact:

• Futures trading costs: Increased significantly
• Speculative volume: Likely reduction
• Market stability: Enhanced through higher transaction costs
• Hedging: Still economically viable, speculation deterred

Options STT Increases:

Options Premium:

• Current Rate: 0.10% STT
• New Rate: 0.15% STT
• Increase: 50%

Options Exercise:

• Current Rate: 0.125% STT
• New Rate: 0.15% STT (convergence)
• Increase: 20%

Combined Effect: Uniform 0.15% rate across options transactions

Impact & Rationale:

• Options trading costs: Increased to moderate volume
• Speculative strategies: Higher cost disincentive
• Legitimate hedging: Still viable with manageable costs
• Market liquidity: Preserved while reducing speculation
• Volatility: Potentially reduced through higher transaction costs

Trader Impact:

• Trading costs: 50-150% increase in STT burden
• Strategy economics: Speculative strategies become unprofitable
• Market participation: Institutional and legitimate hedging continues
• Volumes: Anticipated reduction in speculative volume

Market Impact:

• Derivatives market: Expected moderation in volume
• Price stability: Potential improvement through reduced speculation
• Liquidity: Managed through institutional participation maintenance

COMPARATIVE ANALYSIS: CHEAPER VS. COSTLIER

Summary Table

Category	Item	Impact	Change
Travel & Tourism	Overseas tour packages	CHEAPER	TCS: 5-20% → 2%
Education	Foreign education remittances	CHEAPER	TDS: 5% → 2%
Medical	Medical tourism/treatment	CHEAPER	TDS: 5% → 2%
Personal Imports	Goods for personal use	CHEAPER	Duty: 20% → 10%
Healthcare	Cancer drugs	CHEAPER	Duty: 20% → 0% (exemption)
Healthcare	Rare disease medicines	CHEAPER	Duty: 20% → 0% (exemption)
Exports	Seafood inputs	CHEAPER	Limit: 1% → 3% of export value
Exports	Shoe uppers	CHEAPER	Duty: 20% → 0% (exemption)
Raw Materials	Scrap, minerals	CHEAPER	Duty: 5-20% → 2%
Energy	Battery manufacturing	CHEAPER	Duty: 20% → 0% (exemption)
Energy	Solar glass	CHEAPER	Duty: 20% → 0% (exemption)
Energy	Nuclear equipment	CHEAPER	Extended exemption till 2035
Manufacturing	Aircraft components	CHEAPER	Duty: 20% → 0% (exemption)
Electronics	Microwave components	CHEAPER	Duty: 20% → 0% (exemption)
Fisheries	High-seas fish catch	CHEAPER	Duty: 20% → 0% (exemption)
E-Commerce	Courier exports	CHEAPER	Limit removed (₹10L → unlimited)
Tax Compliance	Misreporting penalty	COSTLIER	Standard rate → 100% surcharge
Asset Disclosure	Undisclosed movables	COSTLIER	No penalty → Penalties imposed
Trading	Futures contracts	COSTLIER	STT: 0.02% → 0.05%
Trading	Options premium	COSTLIER	STT: 0.10% → 0.15%
Trading	Options exercise	COSTLIER	STT: 0.125% → 0.15%

ECONOMIC IMPACT ASSESSMENT

GDP Growth Context

FY27 GDP Growth Projection: 6.8%-7.2%

Budget’s Role in Growth:

Cost Reduction Measures (Growth Acceleration):

• Consumer relief measures enhance household spending power
• Export duty reductions support manufacturing competitiveness
• Energy sector incentives facilitate transition and capacity addition
• E-commerce facilitation enables digital economy growth
• Strategic sector support promotes manufacturing ecosystems

Cost Increase Measures (Tax Integrity):

• Tax compliance enhancements improve revenue efficiency
• Speculative trading moderation reduces market volatility
• Asset disclosure requirements expand tax base
• Misreporting penalties enhance tax integrity

Net Effect: Balanced approach supporting growth while maintaining fiscal discipline

SECTORAL IMPACT ANALYSIS

Beneficiary Sectors

1. Tourism & Hospitality

• Impact: 15-20% growth in overseas tour bookings
• Mechanism: 60-90% TCS reduction on tour packages
• Beneficiaries: Travel agencies, tour operators, hospitality sector

2. Healthcare & Pharmaceuticals

• Impact: Enhanced drug accessibility and affordability
• Mechanism: Duty-free imports of cancer and rare disease medicines
• Beneficiaries: Patients, hospitals, pharmaceutical companies

3. Seafood & Fisheries

• Impact: 15-25% growth in export volumes
• Mechanism: Enhanced input import allowance and EEZ access
• Beneficiaries: Seafood exporters, fishing communities, coastal economy

4. Leather & Textiles

• Impact: 20-25% growth in leather product exports
• Mechanism: Duty-free shoe uppers imports and extended timeline
• Beneficiaries: Leather manufacturers, artisans, leather clusters

5. Renewable Energy

• Impact: 25-30% cost reduction in equipment
• Mechanism: Duty exemptions for batteries, solar glass, critical minerals
• Beneficiaries: Solar manufacturers, battery makers, energy companies

6. Electronics & Appliances

• Impact: 8-15% cost reduction in manufacturing
• Mechanism: Components and parts duty exemptions
• Beneficiaries: Appliance manufacturers, consumer electronics companies

7. Aerospace & Defence

• Impact: 10-20% cost reduction in manufacturing and MRO
• Mechanism: Aircraft components and defence materials exemptions
• Beneficiaries: Aviation companies, defence contractors

8. E-Commerce & MSMEs

• Impact: Unlimited export capacity
• Mechanism: Value cap removal on courier exports
• Beneficiaries: Small businesses, artisans, start-ups

Affected Sectors (Increased Costs)

1. Financial Markets

• Impact: Reduced speculative derivatives trading
• Mechanism: STT increases on futures and options
• Affected: Active traders, proprietary trading firms
• Positive Effect: Potentially reduced market volatility

2. Tax Compliance Risk

• Impact: Higher costs for non-compliant taxpayers
• Mechanism: Penalty increases for misreporting and non-disclosure
• Affected: Individuals with undisclosed assets or income
• Deterrent Effect: Enhanced compliance incentives

CONSUMER PRICE IMPLICATIONS

Direct Price Reduction Likelihood

High Probability (>50% price reduction):

• Overseas tour packages: 5-15% reduction
• International education costs: 2-5% reduction
• Cancer drug prices: 10-30% reduction
• Imported electronics: 2-8% reduction

Moderate Probability (20-50% price reduction):

• Renewable energy equipment: 5-10% reduction (long-term effect)
• Seafood export prices: Competitive improvement (not direct consumer impact)

Indirect Price Effects

Price Stability/Enhancement:

• Battery and energy storage: Potential long-term affordability through ecosystem development
• Manufacturing costs: Improved competitiveness may sustain prices during growth phase

FISCAL IMPLICATIONS

Revenue Impact

Revenue-Positive Measures:

• Income tax misreporting penalties: Enhanced compliance and revenue
• Securities transaction taxes: Slight increase in derivatives market tax revenue
• Non-disclosure penalties: Expanded tax base through asset disclosure

Revenue-Neutral Measures:

• Duty exemptions: Offset by increased volumes in exempt sectors (e-commerce, exports)
• TCS/TDS reductions: Offset by increased transaction volumes at lower rates

Consolidated Fiscal Impact: Designed to be broadly neutral while improving growth and tax integrity