Finance Minister Nirmala Sitharaman on Sunday unveiled a set of customs duty exemptions in the Union Budget 2026 aimed at strengthening domestic manufacturing in India’s civil and defence aviation sectors.
Presenting the Budget in Parliament, Sitharaman said the government would remove basic customs duty on components and parts used in the manufacture of civilian training aircraft and other civilian aircraft. The measure is intended to deepen India’s aviation manufacturing capabilities and cut reliance on imported equipment.
The Budget also extends similar relief to the defence sector. Raw materials imported for manufacturing aircraft parts used in maintenance, repair and overhaul (MRO) activities, as well as other operational requirements of defence units, will be exempt from basic customs duty.
Together, the steps are designed to improve cost competitiveness for domestic manufacturers, encourage localisation and support the expansion of India’s aerospace and defence industrial base. The exemptions align with the government’s wider effort to build self-reliance in strategic sectors and position India as a global hub for aircraft manufacturing and maintenance services.
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