India Budget to Offer Duty Deferment for Importers
India's 2026 Union Budget will introduce a duty deferment facility for eligible manufacturer-importers, effective from March. The policy is intended to ease cash flow pressures and support inventory-led commerce by allowing businesses to delay duty payments, potentially benefiting merchants who import goods for local sale.
This policy is an extension of the "Turant Customs" program, which aims to create a faceless, paperless, and contactless customs environment to improve the ease of doing business. The core principle is "Clear first-Pay later," allowing for a seamless transition of goods from wharf to warehouse, which supports just-in-time manufacturing models. The Central Board of Indirect Taxes and Customs (CBIC) is rolling out the facility. This specific initiative, part of the Union Budget 2026-27 as announced by Finance Minister Nirmala Sitharaman, is designed to improve liquidity for importers. Previously, this benefit was mainly for Authorised Economic Operators (AEOs), a category of trusted traders. The new rules now include "Eligible Manufacturer Importers" and also double the deferment period for top-tier AEOs from 15 to 30 days, creating an interest-free credit period. This measure is part of a broader government strategy to boost domestic manufacturing, linked to the 'Make in India' initiative. By easing working capital constraints, the government aims to encourage the setup of more manufacturing units and enhance their competitiveness. The move is also intended to encourage more businesses to seek AEO certification. There are currently about 6,000 entities in the Customs "trusted ecosystem," with 1,500 holding high-tier AEO status, a number the government aims to increase. This is a two-year pilot program, designated the Eligible Manufacturer-Importer (EMI) scheme, which will leverage AI and machine learning to reduce physical inspections for accredited firms. Payments will be tracked digitally through the Indian Customs Electronic System (ICES) for transparency.
