Among the key demands is urgent correction of inverted customs duty structures, where import duties on raw materials and intermediates exceed those on finished goods—raising input costs and eroding competitiveness across sectors ranging from textiles and electronics to chemicals and leather.
Finance Minister Nirmala Sitharaman will present the Budget for 2026-27 on February 1.
The Federation of Indian Export Organisations (FIEO) has called for rationalisation of import duties on inputs used by export-oriented industries to ensure parity with finished product tariffs. In textiles, synthetic yarns and fibres face higher duties than finished garments, weakening domestic value chains. In electronics, components such as printed circuit boards, connectors and sub-assemblies attract steeper tariffs than imported finished products, discouraging local value addition.
Similar distortions persist in chemicals and plastics, where raw polymers often carry higher duties than downstream goods, and in leather and footwear, where components and accessories are taxed more heavily than finished footwear.
“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,” FIEO President SC Ralhan said.
He also flagged India’s heavy reliance on foreign shipping lines, which exposes exporters to high freight costs and volatile global shipping rates, and sought targeted policy support to develop globally competitive Indian shipping lines, including access to long-term finance and viability gap funding.FIEO has further proposed extending the 15% concessional corporate tax rate for new domestic manufacturing units by at least five years to support export-led capacity creation.
Sectoral bodies echoed similar concerns. The Apparel Export Promotion Council (AEPC) has sought fiscal incentives, including export scrips, a higher interest subsidy on loans, lower GST on textile machinery, and a new technology upgradation scheme for micro units. AEPC Chairman A Sakthivel said exporters are grappling with an exceptionally challenging environment marked by tariff shocks in key markets such as the US and prolonged geopolitical disruptions.
The United States has imposed a 50% tariff on Indian goods since August, sharply disrupting exports to India’s largest overseas market.
The Council for Leather Exports (CLE) has requested reinstatement of basic customs duty exemptions on bovine crust and finished leather imports, along with changes to the Import of Goods at Concessional Rate of Duty (IGCR) scheme. The sports goods industry has sought a cut in import duties on willow and cane, while seafood exporters have called for feed subsidies, rationalisation of RoDTEP rates and faster tax refunds.
Kolkata-based seafood exporter Yogesh Gupta, managing director of Megaa Moda, said targeted support was critical to offset rising costs and shrinking margins. Meanwhile, Deloitte India has urged the Budget to prioritise export credit and concessional financing for MSMEs and fund exploration of critical minerals to strengthen trade resilience.
“Rising global protectionism, frequent tariff hikes and non-tariff barriers are increasing uncertainty for Indian exporters,” said Rumki Majumdar, Economist at Deloitte India.
Merchandise exports during April–December 2025-26 rose 2.44% to $330.29 billion, while imports climbed 5.9% to $578.61 billion, pushing the trade deficit to $248.32 billion during the nine-month period, government data showed.