Commerce Secretary Highlights Budget 2026 Support for Manufacturing, Logistics, and SEZ Reforms to Enhance Shipments
The Union Budget for 2026-27 has unveiled a comprehensive strategy aimed at bolstering India’s export sector, with a strong emphasis on manufacturing growth and trade facilitation. Commerce Secretary Rajesh Agrawal highlighted that the budget includes targeted support for both labor-intensive and high-tech industries. Key policy initiatives are set to ease compliance burdens, thereby enhancing India’s position in global trade. Agrawal described the budget as an excellent framework that will promote trade diversification and strengthen export competitiveness across various sectors.
Targeted Support for Key Industries
The Union Budget outlines specific measures to support crucial sectors such as electronics, information technology, pharmaceuticals, marine products, leather, textiles, and semiconductors. These initiatives are designed to enhance the competitiveness of Indian exports. Notably, Finance Minister Nirmala Sitharaman announced duty-free imports of certain inputs to aid leather exporters, who are currently grappling with high tariffs in the United States. This move comes as India’s leather exports saw a slight decline of 0.23 percent, totaling $3.3 billion from April to December 2025-26. The government aims to revitalize the leather industry by alleviating some of the financial pressures faced by exporters.
Revitalizing Industrial Clusters
The budget also emphasizes the revival of 200 legacy industrial clusters through significant investments in infrastructure and technology upgrades. This initiative is expected to lower production costs, boost productivity, and enhance the competitiveness of traditional export hubs. The commerce ministry has indicated that reforms in Special Economic Zones (SEZs) will focus on improving capacity utilization and economies of scale while maintaining an export-oriented approach. These reforms are anticipated to strengthen the overall resilience of the SEZ ecosystem, making it more attractive for global manufacturers and technology firms.
Enhancing E-commerce and Small Exporters
In a bid to support small exporters, the government has removed the Rs 10 lakh value cap on courier exports, which is expected to stimulate e-commerce-driven shipments. Additionally, improved processes for handling returned consignments aim to reduce friction in global business-to-consumer trade. The budget also extends concessional customs duty regimes for gold and silver dore bars and lab-grown diamond inputs, which will facilitate domestic refining and value addition. These measures are part of a broader strategy to enhance the export capabilities of small and medium enterprises.
Reforms for IT and IT-Enabled Services
The government has proposed targeted tax and regulatory reforms for the IT and IT-enabled services sectors. These reforms include a unified classification of IT services, increased safe-harbor thresholds, automated approvals, and expedited Advance Pricing Agreements. Such initiatives are expected to provide long-term policy certainty, making India a more attractive destination for Global Capability Centres and international service providers. The overall aim is to create a robust framework that supports the growth of India’s digital economy and enhances its global competitiveness.
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