Budget 2026: FIEO bats for rationalisation of import duties on key inputs used by export-oriented industries

The Union Budget 2026 is just three days away and expectations and wishlists from industry associations are pouring in. The association of export organisations have called for uniform and rationalisation of import duties on different raw materials products to make the domestic manufacturing competitive.

The Federation of Indian Export Organisations (FIEO) in its budget wish list has recommended rationalisation of import duties on key inputs used by export-oriented industries so that input costs are aligned with finished product duties. It said that for instance, synthetic yarns and fibres attract higher customs duties than finished fabrics and garments, which adversely impacts the textile and apparel value chain.

Similarly, electronic components, such as printed circuit boards, connectors, and sub-assemblies, face higher duties compared to imported finished electronic products, discouraging domestic value addition. Electronic components are the third largest category of our import bills at an estimated value of $70-80 billion. These include semiconductor, Integrated circuits, printed circuit boards, and EV components.

In the chemical and plastics sector, basic raw chemicals and polymers often attract higher duties than downstream finished products, undermining Indian manufacturers. The leather and footwear sector also faces higher duties on inputs like components and accessories vis-à-vis imported finished footwear.

As per FIEO President SC Ralhan, correcting these anomalies by lowering or restructuring duties on raw materials will reduce production costs, ease working capital pressures, encourage domestic manufacturing, and strengthen India's export competitiveness. He also said India's heavy dependence on foreign shipping lines exposes exporters to high freight costs, supply disruptions, and volatility in global shipping rates. Further, FIEO has proposed extending the 15 per cent concessional corporate tax rate for new domestic manufacturing units for at least another five years.