On February 1, 2025, Union Finance Minister Nirmala Sitharaman presented the Union Budget 2025-26, outlining a roadmap for India’s economic growth and development. The Budget focused on key sectors such as agriculture, micro, small, and medium enterprises (MSMEs), investments, and exports while aligning with the vision of ‘Viksit Bharat’ (Developed India).
One of the significant aspects of the Budget was the revision of customs duties, which resulted in some items becoming cheaper due to tax reductions, while others became costlier due to increased levies. The Budget also emphasized exempting customs duty on essential life-saving drugs, ensuring affordability and accessibility for patients.
Here’s a detailed look at the items that are getting cheaper and those that will now be more expensive.
What’s Getting Cheaper?
The Budget 2025-26 introduced several tax reductions and duty exemptions, particularly on key industrial raw materials, essential medicines, and consumer electronics. These changes are expected to reduce production costs and boost affordability for consumers.
1. Electronics and Technology Products
– Carrier Grade Internet Switches: Aimed at enhancing India’s telecommunication infrastructure, the exemption of customs duty on these switches will lower the cost of internet services and improve connectivity across urban and rural areas.
– LED/LCD TVs – With the government reducing duties on key TV components, prices of LED and LCD television sets are expected to drop, making them more affordable for Indian households.
2. Healthcare and Life-Saving Medicines
– 36 Life-Saving Drugs Exempted from Basic Customs Duty : This includes essential medicines for cancer, rare genetic disorders, and cardiovascular diseases. By eliminating customs duty, the government aims to make crucial treatments more accessible to the public.
3. Electric Vehicles (EVs) and Sustainable Materials
– Scrap of Lithium-ion Batteries – Lithium-ion battery scraps are now exempt from duties, which will help reduce battery costs for electric vehicles (EVs) and lower the price of rechargeable battery-based products.
– Lead, Zinc, and 12 More Critical Minerals– The exemption on raw materials essential for batteries, electronic components, and renewable energy systems will support India’s push for green energy solutions and self-reliance in mineral sourcing.
4. Marine and Food Products
– Frozen Fish & Frozen Fish Paste (Surimi): Customs duty on Surimi (fish paste) has been slashed from 30% to 5%, making seafood products more affordable for consumers and benefiting India’s fisheries sector.
5. Fashion and Leather Goods
– Leather Belts, Shoes, and Jackets: Import duties on raw materials used for leather products have been reduced, ensuring that fashion accessories and footwear become more budget-friendly for consume
6. Shipbuilding and Industrial Growth
– Raw Materials for Ship Manufacturing: Customs duty exemption for shipbuilding materials has been extended for an additional 10 years, supporting the growth of India’s maritime and naval industries.
– Cobalt Products: Used in battery manufacturing and high-tech industries, cobalt products now have lower import duties, reducing production costs for electronics and renewable energy sectors.
What’s Getting Costlier?
While several essential goods saw tax reductions, some items became more expensive due to increased customs duties. These adjustments aim to boost domestic manufacturing by discouraging excessive imports and promoting ‘Make in India’ initiatives.
1. Technology and Electronics
– Interactive Flat Panel Displays: The customs duty on large touchscreen panels used in smart classrooms, offices, and digital kiosks has been increased. This could lead to higher costs for educational institutions and corporate buyers.
2. Textiles and Apparel
– Knitted Fabrics: The customs duty on imported knitted fabrics has been raised, making clothing and textile products more expensive. This move is intended to support domestic textile manufacturers and boost local production.
Last year, the Union Budget 2024 introduced major reductions in customs duty on cancer medicines and mobile phones, leading to a sharp decline in their retail prices. Additionally, the government had:
– Lowered duties on imported gold, silver, and leather goods, making jewelry and fashion products cheaper.
– Reduced tariffs on seafoods, benefiting both consumers and the fisheries industry.
– Raised customs duty on ammonium nitrate (used in fertilizers) by 10%, making agricultural production more expensive.
– Imposed a 25% duty on non-biodegradable plastics to encourage environment-friendly alternatives.
Impact of Budget 2025-26 on Consumers and Industries
1. Benefits for Consumers
– Affordable Medicines: Exempting customs duties on life-saving drugs will make healthcare more accessible and lower medical costs.
– Cheaper Consumer Electronics: Reduction in TV and internet equipment prices will make home entertainment and digital connectivity more affordable.
– Lower Costs for Sustainable Energy: By reducing duties on battery raw materials, the government has made EVs and green energy solutions more economical.
2. Boost for Industries
– Shipbuilding and Maritime Growth: Duty exemptions for ship manufacturing will enhance India’s maritime sector, creating jobs and promoting exports.
– Leather and Textile Manufacturing: By taxing imported fabrics and reducing leather goods duties, the government is encouraging domestic production and employment generation.
– Stronger Fisheries and Marine Industry: Lowering taxes on fish and seafood products will help boost India’s seafood exports and domestic consumption.
3. Challenges Due to Increased Costs
– Higher Prices for Fashion Apparels: Importing knitted fabrics will be more expensive, which could result in higher prices for clothing and textiles.
– Costlier Digital Education Equipment: The price increase for interactive flat panel displays might impact the affordability of digital learning tools in schools and universities.
The Union Budget 2025-26 takes a strategic approach to economic expansion, focusing on reducing dependency on imports while ensuring that essential goods remain affordable. The government’s decision to lower taxes on life-saving medicines, electronics, marine products, and green energy materials will benefit both consumers and industries.
At the same time, increased taxes on textiles and digital panels aim to encourage domestic production and strengthen India’s manufacturing sector under the ‘Make in India’ and ‘Atmanirbhar Bharat’ initiatives.
While certain products may become costlier, the overall impact of the Budget favors long-term economic sustainability, industrial growth, and consumer well-being. By striking a balance between affordability and self-sufficiency, Budget 2025-26 sets the stage for India’s transition into a developed economy.