Last Updated on February 6, 2026
The Union Budget 2026–27, presented on 1 February 2026, brought a series of tax and duty changes that will affect prices across many goods and services. Some items are expected to become cheaper, providing cost relief to consumers and businesses, while others may become costlier, mainly due to duty increases or tax adjustments.
Understanding these changes, especially for enterprises, MSMEs, traders, importers, exporters, and even regular consumers, will help you plan purchasing decisions, pricing strategies, and compliance ahead of the coming financial year.
Why Price Changes Matter After Budget 2026?
Price changes triggered by Budget decisions have a real financial impact on businesses and households. Customs duty cuts can reduce import costs and production expenses, while higher taxes can increase input costs, affect retail prices, or change profit margins for traders and manufacturers.
This article summarises what is expected to get cheaper, and what may become costlier, along with practical implications.
Items Likely to Get Cheaper
Here’s a detailed list of goods and services that are expected to become more affordable in Budget 2026:
1. Medicines and Healthcare Supplies
- 17 cancer drugs and medicines for seven rare diseases are now exempt from basic customs duty.
- Medicines and food for certain special medical purposes imported for personal use are also duty-free.
This is expected to reduce the cost of critical healthcare products.
2. Import-Dependent Goods
- Microwave ovens’ exemption on specified components used in manufacturing may reduce prices.
- Solar energy equipment & inputs duty reductions on solar glass and related materials support cheaper renewable investments.
- Electric vehicle (EV) components, including lithium-ion batteries, are likely to see duty reduction to boost adoption and local manufacturing.
- Aircraft parts and certain capital goods face reduced duties, easing production costs for aviation and strategic sectors.
- Goods imported for nuclear power projects and critical minerals may also benefit from exemptions.
All of these moves aim to boost domestic manufacturing and reduce reliance on fully imported finished goods.
3. Personal Imports
Customs duty on personal imports by international travellers has been reduced from 20 % to 10 %, making items you bring home from abroad comparatively cheaper.
4. Travel and Overseas Education
Tax Collected at Source (TCS) on overseas tour packages and foreign remittances for education and medical expenses has been reduced to 2 %, significantly lowering upfront costs for travellers and students.
5. Exports and Related Inputs
- Duty reliefs and extended export realisation periods for textiles and leather improve cost competitiveness for exporters.
- Fish caught by local fishermen and shoe uppers for exporters enjoy duty exemptions, reducing raw material costs.
Items Likely to Get Costlier
Some goods and services are expected to become more expensive due to duty increases or new tax structures:
1. Imported Consumer Goods
- Low-cost imported umbrellas and some telecom equipment may see higher customs duties, increasing retail prices.
- ATM/Cash dispenser machines and parts are expected to be costlier due to duty hikes.
2. Trading and Financial Costs
Securities Transaction Tax (STT) on futures has increased from 0.02 % to 0.05 %, and on options to 0.15 %, impacting traders’ costs.
These higher levies may slightly increase trading costs for active stock market participants.
3. Tobacco and Sin Goods
Sin taxes on products like chewing tobacco, gutkha, and similar items have increased significantly, raising the National Calamity Contingent Duty and making these items more expensive.
This is part of a broader public health policy.
4. Certain Industrial Inputs
Inputs like potassium hydroxide, fertiliser inputs (ammonium or nitro-phosphate fertilisers), and naphtha will cost more due to higher basic customs duty.
These changes could raise costs for specific industrial and manufacturing segments.
Practical Impact: What Businesses Should Know?
These price shifts can have different implications for businesses:
- Manufacturers & Traders: Lower import duties on inputs can reduce production costs, while higher duties on certain imported equipment or parts may increase operating expenses.
- Exporters: Duty exemptions on export-linked inputs can improve cost competitiveness and profitability.
- Hospitality & Healthcare: Cheaper medical imports may reduce procurement costs; however, costlier equipment (e.g., coffee machines) might affect café and service businesses.
- Travel & Education Services: Lower TCS rates reduce cost pressures on customers booking overseas services or remitting funds abroad.
How Kanakkupillai Helps You Navigate Budget Changes?
At Kanakkupillai, we help businesses understand and act on Budget 2026 changes affecting pricing, imports, GST, and compliance. Our support includes:
- Customs duty and tax advisory
- GST registration & filing
- Import-export compliance consulting
- Business structuring for tax efficiency
- Pricing strategy advisory for traders and manufacturers
Whether you’re an importer looking to adjust pricing, a manufacturer planning procurement strategy, or a business adapting to duty changes, our experts help you make data-informed decisions while staying compliant.
Frequently Asked Questions (FAQs)
1. Which products will become cheaper after Budget 2026?
Products such as key medical drugs (including cancer and rare disease medicines), microwave ovens, solar equipment components, EV and strategic imports, and personal imports by travellers are expected to be cheaper.
2. Why are some items becoming costlier?
Certain goods, like imported umbrellas, ATMs, and some industrial inputs, face higher customs duty or taxes to promote domestic production and generate revenue.
3. How does a reduced TCS on foreign travel help consumers?
TCS reduction to 2 % lowers upfront costs for overseas travel bookings and foreign remittances for education and medical treatment, making them more affordable.
4. Will these changes affect GST?
While this article focuses on customs duty and TCS changes, many price impacts combine GST with customs changes; businesses should ensure correct tax treatment in returns.
5. Can Kanakkupillai help me plan pricing after these changes?
Yes. We provide pricing strategy and tax compliance support tailored to your business, helping you adapt to changes effectively.
6. How soon will these price changes take effect?
Most duty and TCS changes will be effective from the start of the new financial year (April 1, 2026), subject to official notifications.
