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CHEMEXCIL
Basic Chemicals, Cosmetics & Dyes Export Promotion Council
(Set-up by Ministry of Commerce and Industry, Govt of India)
Jhansi Castle, 4th floor, 7-Cooperage Road, Mumbai - 400 001.
Tel: +91-22- 69821200-206
info@chemexcil.in Web : https://chemexcil.in
EPC:LIC:UNION BUDGET:2026-27:PW-DG:1089 1st February 2026
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All Members of the Council
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UNION BUDGET 2026-27:- Highlights for Chemicals/ Exports
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Dear Members,
As you are aware, Union Budget 2026-27 has been presented by Hon’ble Minister of Finance Smt. Nirmala Sitharaman today at 11.00am.
In this regard, we would like to submit Highlights/ impact on Chemical sector as follows:
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1. To accelerate and sustain economic growth by enhancing competitiveness and building resilience to volatile global dynamics
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2. To fulfil the aspirations of people and build their capacity and make them strong partners in India's path to prosperity
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3. To ensure 'sab ka saath, sab ka vikas.' It is to ensure that every family, community, region has access to resources, amenities opportunities for meaningful participation
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Scaling up manufacturing in seven strategic and frontier sectors
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Rejuvenating legacy industrial sectors
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Creating champion MSMEs
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Delivering a powerful push for infrastructure
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Ensuring long-term security and stability
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Developing city economic regions
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a. To develop India's global bio-pharma hub, it is proposed Biopharma Shakti with Rs 10,000 crore outlay over 5 years.
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b. To enhance chemical production: Three dedicated chemical parks to enhance domestic production, reduce import dependence, and improve cluster-based manufacturing competitiveness, Plug and Play model.
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c. Propose a scheme for container manufacturing with a budgetary allocation of Rs 10,000 cr over 5 years
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d. Building capacity for Strong Capital Goods: It is propose a high-tech toolrooms establishment for manufacturing high-precision components at scale and lower costs. An introduction of a scheme for enhancement of construction and infrastructure equipment’s to strengthen production of high-value CIE
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e. Orissa, Kerala, TN and Andhra Pradesh to be part of rare earth corridor
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f. Introduced a credit guarantee support mechanism, to revive 200 legacy industrial clusters to improve cost competitiveness creating champion MSMEs.
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g. Proposal to top up self-reliant India fund with ₹2,000 crore.
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h. Proposed liquidity support to MSMEs to leverage their full potential, also proposes set up of transaction settlement platform.
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i. Proposed to introduce Rs 10,000 crore SME growth fund. The idea is to incentivize SMEs based on selected criteria.
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j. Self-reliant India fund to Rs 2000 crore to continue support to micro enterprises.
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k. Plans to facilitate the creation of modular courses to train 'Corporate Mitras'. Which will help MSMEs to ensure regulatory compliance.
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l. Carbon capture utilization and storage (CCUS). Government is aligning with roadmap of 2025. An outlay of Rs. 20,000 crores over the next five years for the purpose of Carbon capture utilization and storage.
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m. Seven high speed rail corridors between cities announced: Mumbai to Pune , Hyderabad to Bengaluru, Chennai to Bengaluru, New Delhi to Varanasi, Varanasi to Siliguri
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n. A high-powered Education-to-Employment Enterprises Standing Committee will be set up to strengthen India’s services sector. The committee will focus on identifying areas with high potential for growth, employment generation, and export opportunities, aiming to position India as a global leader in services.
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o. Exemption from income tax for five years to nonresidents providing capital goods, equipment or tooling, to any toll manufacturer in a bonded zone.
Indirect Taxes Proposals:- Important custom changes for Chemicals are as under (Copy of notification enclosed)
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Basic customs duty exemption given to capital goods used for manufacturing Lithium-Ion Cells for batteries, to those used for manufacturing Lithium-Ion Cells for battery energy storage systems
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Extension of the existing basic customs duty exemption on imports of goods required for Nuclear Power Projects till the year 2035 and expand it for all nuclear plants irrespective of their capacity
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Basic customs duty exemption to the import of capital goods required for processing of critical minerals in India.
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A special one-time measure, to facilitate sales by eligible manufacturing units in SEZs to the Domestic Tariff Area (DTA) at concessional rates of duty. The quantity of such sales will be limited to a prescribed proportion of their exports. Necessary regulatory changes will be undertaken to operationalize these measures while ensuring level-playing field for the units working in the DTA.
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Custom Duty
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BCD rate on Potassium hydroxide, falling under tariff item 2815 20 00, is being increased from Nil to 7.5%, vide omission of S. No. 21 of notification No. 36/2024-Customs dated 23rd July, 2024 [S. No. 6 of notification No. 01/2026-Customs dated 1st February, 2026 refers]. This change will come into effect from 2nd February, 2026
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BCD rate on Sodium antimonate, falling under tariff item 2841 90 00, for use in manufacture of solar glass is being decreased from 7.5% to Nil vide insertion of S. No. 110A in TABLE I of notification No. 45/2025-Customs dated 24th October, 2025 [S. No. I (42) of notification No. 02/2026-Customs, dated 1st February, 2026 refers]. This change is being made effective from 2nd February, 2026
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For further details please check attached PDF (Duty in FB)
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Duty deferral period for Tier 2 and Tier 3 Authorized Economic Operators from 15 days to 30 days.
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Extension of validity period of advance ruling, binding on Customs, from the present 3 years to 5 years
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Regular importers with trusted longstanding supply chains will be recognized in the risk system, so that the need for verification of their cargo every time can be minimized. Export cargo using electronic sealing will be provided through clearance from the factory premises to the ship
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For import of goods not needing any compliance, filing of bill of entry by a trusted importer, and arrival of goods will automatically notify Customs for completing their clearance formalities. This will enable goods to be released immediately on arrival
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The Customs warehousing framework will be transformed into a warehouse operator-centric system with self-declarations, electronic tracking and risk-based audit
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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.
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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.
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Fund allocations in Schemes
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1. Duty Drawback – Rs. 185.54 Cr
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2. Export Promotion Mission -Rs. 2300 Cr.
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3. RoDTEP- Rs. 10,000 Cr.
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4. Foreign Trade and Export Promotion: Rs. 4473.37 Cr
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Please note CHEMEXCIL is organizing a Webinar on "Post-Budget Analysis of Impact of Union Budget 2026-27 on Export/ Import with the Experts from Universal Connections LLP on 4th February 2025 at 12.00 noon . The registration link of the webinar is https://forms.gle/eUmD6Do3g54t4n426
For further details please use below links.
https://www.indiabudget.gov.in/doc/Budget_Speech.pdf
https://www.indiabudget.gov.in/doc/bh1.pdf
https://www.indiabudget.gov.in/doc/Key_to_Budget_Document_2026.pdf
Feed-backs, if any may also be sent to the council on e-mail ids:- pw@chemexcil.in and dg@chemexcil.in records/ further deliberations, if required.
Thanking you,
Dr. Satish Wagh
Chairman
CHEMEXCIL
Encl : 1 dojstru1
Cus0226
Duty in FB
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