India’s labour-intensive industries such as textiles, seafood, footwear and leather goods received a boost from budget proposals that cut customs duty on scores of inputs, a move aimed at enhancing their competitiveness in the international market, especially the US, where the Trump administration’s 50% tariffs pose a high barrier.
Union finance minister Nirmala Sitharaman announced several measures to boost exports of seafood, leather and textile products in her budget speech on Sunday.
“I propose to increase the limit for duty-free imports of specified inputs used for processing seafood products for export, from the current 1% to 3% of the FOB value of the previous year’s export turnover,” said the minister.
After the Trump administration’s levies came into force in August, exports of Indian fish and other aquatic invertebrates fell by 9.2% on an annualised basis to $1.25 billion in April-November 2025.
Similarly, exports of Indian knitted apparels dipped by 3.88% to $1.70 billion, other made-ups fell by 6.47% to $1.82 billion and leather items dipped by 2.24% to $525 million in the period.
To address this, Sitharaman said: “I propose to increase the limit for duty-free imports of specified inputs used for processing seafood products for export, from the current 1% to 3% of the FOB value of the previous year’s export turnover”.
She also proposed to allow duty-free imports of specified inputs, currently available for leather or synthetic footwear, for exports of shoe uppers as well. Additionally, the time period for the export of final products for these sectors has been extended from six months to one year.
Union commerce and industry minister Piyush Goyal called it a budget for a “future ready Bharat” which will further boost exports and domestic manufacturing.
“With a dedicated focus on accelerating manufacturing growth, boosting exports & positioning India as an attractive investment destination, the Budget reinforces the nation’s role as a trusted global economic partner,” he said in a post on X.
Commerce secretary Rajesh Agrawal noted the budget provides much-needed systemic support.
“The budget is very positive for trade as it provides the much needed systemic and structural support for long-term steady growth of exports. It will make Indian manufacturing competitive leading to sustained growth in exports. Trade facilitation measures under the budget will improve export competitiveness by reducing costs,” Agrawal said.
The proposals will strengthen the services sector and give a sectoral boost to semiconductors, marine, textiles, leather and other labour-intensive sectors, he added.
Sitharaman announced duty concessions to help India develop global manufacturing prowess by establishing economical and reliable supply chains.
She proposed extending the basic customs duty (BCD) exemption to capital goods used for manufacturing lithium-ion cells for batteries to those used for battery energy storage systems. She also exempted BCD on sodium antimonate, used in the manufacture of solar glass.
Aligning with private investment opening in the sector, the finance minister extended customs duty exemption on goods required for nuclear power projects till 2035 and expanded it for all nuclear plants irrespective of their capacity. She also proposed exemptions on capital goods for processing critical minerals, a must for sectors such as automobiles and solar power.
Assocham president Nirmal K Minda said the budget took a calibrated approach to enhance India’s competitiveness in both manufacturing and services so that it can fully utilize current and prospective free trade agreements (FTAs).
“Equally important is the opportunity emerging from India’s recent FTAs, which position exporters to tap diversified markets, integrate into global value chains. With targeted support for quality, compliance and market access, Indian exporters can convert global disruption into a durable competitive advantage,” Minda said.
The Modi government has concluded eight FTAs, involving 37 countries, mostly with developed nations, including the United Arab Emirates (UAE), Australia, the four-nation European Free Trade Association (EFTA) bloc, the United Kingdom (UK), Oman, New Zealand and the European Union.
It concluded negotiations for the “mother of all FTAs” with the EU on January 27, integrating two markets with a combined GDP of approximately $25 trillion and a population of 1.9 billion. The latest deal came close on the heels of the India-UK FTA and the four-nation EFTA bloc – together a $30 trillion-plus integration.
FIEO president SC Ralhan said the government’s focused approach towards strengthening domestic manufacturing in high-value and strategic sectors such as electronics, semiconductors, biopharma, textiles, chemicals, aircraft components, construction equipment and rare earth magnets will boost the economy.
The trade facilitation measures such as duty exemptions on key inputs, extension of export timelines, recognition of trusted exporters and clearance of export cargo from factory premises will significantly reduce transaction costs, improve ease of doing business and enhance supply-chain efficiency, he said.
“These reforms will directly strengthen exporter confidence and competitiveness,” Ralhan added.
