Aircraft To Nuclear Projects: How Customs Duty Exemptions In Budget Will Help Offset Trump Tariffs

Last Updated:February 01, 2026, 14:10 IST

A look at the customs duty exemptions proposed in the Budget presented by Finance Minister Nirmala Sitharaman on Sunday

FM Nirmala Sitharaman presented the Budget on Sunday. (PTI)

From civil and defence aircraft manufacturing materials to nuclear power projects, Finance Minister Nirmala Sitharaman has announced customs duty exemptions on a wide range of items, which may offset US President Donald Trump’s tariffs imposed on India.

A look at the customs duty exemptions proposed in the Budget presented on Sunday.

THE CUSTOMS DUTY EXEMPTIONS

• Existing basic custom duty exemption on imports of goods required for nuclear power projects to be extended till 2035.
• Basic customs duty exemptions to the import of the capital goods required for critical minerals in India to be provided.
• Basic customs duty on components and parts required for the manufacture civilian training and other aircraft to be exempted.
• Basic customs duty on specified parts used in the manufacture of microwave ovens have been exempted.

The government also announced a special one-time measure to enable sales by eligible manufacturing units in special economic zones to the domestic tariff at constructional rates of duty.

The Budget has also proposed to increase the limit for duty-free imports of specified inputs for processing seafood for export to 3% from 1% of Free On Board value for the same.

It has also proposed to allow duty free imports of specified inputs available for exports of leather. It may further extend basic customs duty exemption for capital goods used to manufacture Battery Energy Storage Systems. It also proposed an exemption for customs duty on sodium antimonate, which is used in the manufacture of solar glass.

The Centre is also proposing to exempt customs duty on imports of goods for nuclear power projects till 2035.

Moreover, approvals required for cargo clearance from various Government agencies will be seamlessly processed through a single and interconnected digital window by the end of the financial year. For goods not having any compliance requirement, clearance will be done by Customs immediately after online registration is completed by the importer, subject to the payment of duty.

A Customs Integrated System (CIS) will be rolled out in 2 years as a single, integrated and scalable platform for all the customs processes.

WHAT ARE TRUMP TARIFFS?

In 2025, the Trump administration implemented significant tariffs on Indian goods, primarily citing India’s continued purchase of Russian oil and trade imbalances.

As of February 2026, many Indian exports to the U.S. face a 50% total duty:

10% Baseline Tariff: A general duty applied to almost all U.S. imports since April 2025.

15% Reciprocal Tariff: Imposed to counter India’s own high tariffs on U.S. products.

25% Penalty Tariff: An additional levy triggered on August 27, 2025, specifically targeting India’s refusal to halt Russian oil imports.

In January 2026, President Trump backed a new sanctions bill that could increase punitive tariffs to 500% for countries continuing to buy Russian oil.

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