2026 to bring data, policy, tax changes; labour codes, CBAM to take effect

With new GDP, CPI and IIP base years, sweeping tax reforms, GST overhaul, labour code rollout and EU's carbon tax, 2026 is set to reshape India's economic, regulatory and labour landscape

The year 2026 will bring in various new reforms, deadlines, policy and taxation changes ranging from the revision of base year for calculating GDP, IIP to European Union's (EU) Carbon Border Adjustment Mechanism (CBAM) coming into force and the new labour codes, tax reforms getting fully operational. 

 

The new gross domestic product (GDP) series with base year 2022–23, replacing the 2011–12 base, will be released on February 27, 2026, while the new CPI series with base year 2024, replacing the 2012 series, is scheduled for release on February 12, 2026.

 

Additionally, the new IIP (index of industrial production) series with base year 2022–23, replacing the current 2011–12 base will be released on May 28, 2026. The change in base year is expected to provide more accurate economic data that aligns better with global standards.

 

From 2026, India will implement significant tax reforms. The Income Tax Act, 2025 replaces the 1961 law effective April 1, 2026, simplifying provisions, introducing a single ‘Tax Year’ (April-March), rationalising TDS/TCS rules with consolidated tables, enhancing digital compliance, and retaining both tax regimes with revised slabs.

 

The GST 2.0 reforms, effective from September 22, 2025, will have their first full calendar year impact in 2026. These reforms simplify the rate structure by largely abolishing the 12 per cent and 28 per cent slabs, shifting most goods and services to 5 per cent or 18 per cent, lowering costs for essentials, household items, and FMCG products, while adding targeted excise duties and cess on items like cigarettes and pan masala to curb consumption.

 

The EU’s CBAM, aimed at preventing ‘carbon leakage’, will kick-in from January 2026. It is a tool to put a fair price on the carbon emitted during the production of carbon intensive goods that are entering the EU. This means that imports of more than 50 tonnes of cement, iron and steel, aluminum, fertiliser, electricity and hydrogen will require an authorisation during the time of import. The transitional phase had kicked in from October 1, 2023. The measure, however, is not India-specific and will be applicable to all countries.

  While the four new labour codes, which were brought into force on November 21, are targeted to be fully operational from April 1, 2026, a Joint Platform of Central Trade Unions and Sectoral Federations and Associations has resolved to call a general strike on February 12 in protest against the new codes, claiming an attack on workers' rights and entitlements.

 

The government however, will publish the new draft rules for the codes in January, followed by a public consultation for 45 days. After the codes are made fully operational, implementation will be subject to notification by states since labour is a concurrent subject.

 

The government has set a target to expand social security coverage to 100 crore workers from the current 94 crore workers - assessed by International Labour Organisation (ILO) - by March 2026. The ILO is reportedly conducting its Phase II assessment, the results of which are still awaited.

 

April 30 would be the deadline for voluntary enrollments under Employees' Enrolment Scheme announced in October 2025. The scheme encourages existing and newly covered employers under the EPFO Act to voluntarily declare and enrol eligible employees who were previously left out of EPF coverage. It applies to employees who joined between July 1, 2017, and October 31, 2025. The operation of the scheme will end on April 30, 2026, after being open for six months.