Shopping abroad or online? Budget 2026 cuts customs duty burden by half

How the customs duty cut will impact your overseas purchases

For travellers and online shoppers who regularly bring goods into India from overseas, the Union Budget 2026–27 has delivered welcome relief.

 

In her Budget 2026 speech on February 1, Nirmala Sitharaman announced that customs duty on goods imported for personal use will be cut by half - from the current 20 per cent to 10 per cent - reducing the cost burden on individual buyers.

 

"To rationalise the customs duty structure for goods imported  for personal use, I propose to reduce the tariff rate on all dutiable  goods imported for personal use from 20 per cent to 10 per cent," said the Finance Minister.

 

The move directly affects items brought into the country by travellers or ordered online from abroad for personal consumption—categories that earlier attracted relatively high customs duties. For many consumers, these charges often came as an unpleasant surprise at airports or during delivery of international parcels. 

he Budget reduces the customs duty rate on dutiable personal imports from 20% to 10%, effectively halving the duty burden on individuals importing goods for their own consumption, whether through overseas travel, gifts, or cross-border e-commerce. 

 

"Goods for personal use generally include items such as clothing, footwear, personal electronics, gadgets, watches, accessories, household items, and certain medicines imported in reasonable quantities and not intended for commercial resale, often assessed under the personal effects or baggage provisions of customs law," said Sukrit Kapoor, Partner, King Stubb & Kasiva, Advocates and Attorneys.

 

Rajarshi Dasgupta, executive director (Tax at AQUILAW, said the proposal is a meaningful step towards easing costs for ordinary consumers and travellers. According to him, lowering duties on personal imports makes overseas purchases more predictable and affordable, especially in an era of cross-border e-commerce and digital buying.

 

The reduced duty is also expected to discourage informal channels that people often turn to in order to avoid steep charges. By making official imports less punitive, the government hopes to encourage better compliance with customs rules while maintaining transparency.

 

“The Budget’s proposal to reduce customs duty on goods imported for personal use represents a meaningful move toward easing the cost burden on ordinary consumers and travellers. By lowering the tariff rate on dutiable personal imports — a category that previously carried significantly higher levies — the government is recognising the evolving patterns of cross-border shopping and digital purchases," said Dasgupta. He added that by calibrating duties carefully, the move "balances revenue needs with consumer relief, making travel and overseas purchases less punitive without undermining domestic industry protections". 

The proposal is particularly relevant in the context of rising international travel and the rapid growth of online purchases from foreign sellers, as it lowers the landed cost of such imports and reduces friction at the customs stage. 

 

"From an impact perspective, the measure is expected to provide direct cost relief to consumers, encourage legitimate personal imports, and simplify tariff administration, while also potentially increasing import volumes to partially offset revenue implications. At the same time, the reduced duty may intensify competitive pressure on domestic manufacturers of similar consumer goods, requiring careful calibration of future tariff policy. Overall, the proposal reflects the Government’s broader intent to modernise India’s customs framework, align it with global trade practices, and respond to evolving consumption patterns without compromising regulatory oversight," said Kapoor.