India, Feb. 4 -- Budget 2026-27 came at a critical moment for trade, just days after India concluded a free trade agreement with the European Union. It offered an opportunity to align customs policy with India's growing global trade ambitions. It takes a cautious approach - reducing costs for strategic manufacturing, clean energy, defence, health care, and exporters, while selectively raising tariffs to protect a few consumer goods. The result is a budget that delivers some focused benefits but leaves the deeper structural weaknesses of India's import tariff regime and customs system largely unaddressed.

The most consequential customs changes in the budget lie in the removal of basic customs duties (BCD) on capital goods and strategic in...