Budget 2026: What Gets Cheaper, What Gets Costlier
- 2nd February 2026
- 4 min read
PL Capital
Summary
Budget 2026 reshapes prices through changes in customs duties, excise and tax rules. Medicines, mobile phones (indirectly), EV components, textiles and overseas travel may get cheaper, while tobacco, alcohol, select minerals and luxury imports are likely to cost more.Mumbai | February 2
Union Finance Minister Nirmala Sitharaman presented the Union Budget 2026 on Saturday, her ninth consecutive Budget and the third full Budget under Prime Minister Narendra Modi.
With the fiscal deficit pegged at 4.3% of GDP for FY27, the Budget prioritises long-term growth while offering targeted relief through tax simplification and customs duty rationalisation moves that directly and indirectly impact household expenses.
What Gets Cheaper After Budget 2026
Medicines & Healthcare
- Basic Customs Duty (BCD) has been removed on 17 life-saving drugs, including treatments for cancer and other critical illnesses.
- Drugs, medicines and Food for Special Medical Purposes (FSMP) for seven rare diseases have been added to the duty-free import list, improving affordability for specialised care.
Mobile Phones & Electronics
- Prices of mobile phones and select electronics may soften indirectly, as the Budget offers customs duty relief on capital goods and components used in manufacturing.
- A ₹40,000-crore outlay for electronics components manufacturing is expected to strengthen domestic supply chains and reduce input costs over time.
EV Batteries & Clean Energy
- BCD exemption on lithium-ion cells is aimed at lowering battery manufacturing costs and accelerating the electric-vehicle transition.
- Solar glass is set to get cheaper following customs duty exemption, reducing costs for solar module makers.
- Critical minerals used in electronics and clean-energy supply chains may see lower landed costs due to BCD exemptions or duty reductions.
- Biogas-blended CNG may become more affordable due to duty and tax rationalisation linked to cleaner fuel adoption, though the impact is indirect
- Nuclear Energy: Full BCD exemption for all goods required for Nuclear Power Projects (valid until 2035).
Leather, Textiles & Apparel
- Duty cuts on specified textile inputs could lower garment production costs.
- Reduced duty on Wet Blue leather and other raw materials may make leather products, including footwear, more affordable.
Marine Products
- Duty-free import limits for seafood processing inputs, such as shrimp feed, have been increased, supporting exporters and processors.
Aviation Manufacturing
- In a move to strengthen domestic aviation manufacturing, the Budget provides BCD exemption on components and parts, including engines, used in the manufacture of civilian aircraft.
Sports Equipment
- Duty relief on sports goods is expected to improve affordability, promote wider access, and encourage greater sports participation.
Other Consumer-Facing Items
- Microwave ovens and select consumer goods may get cheaper where customs duties on relevant components have been reduced.
- Personal-use imported goods may see lower landed costs due to customs duty rationalisation.
Travel & Overseas Spending
- TCS under the Liberalised Remittance Scheme (LRS) for medical and education expenses has been cut to 2% from 5%.
- TCS on overseas tour packages has also been reduced to 2%, down from earlier rates of 5–20%.
See the detailed duty impact across sectors here.
What Gets Costlier After Budget 2026
Tobacco & Alcohol
- Pan masala, cigarettes, chewing tobacco and jarda-scented tobacco will become costlier due to higher excise duty, cess and a higher tax incidence.
- Alcohol for human consumption may also turn costlier following changes in tax rates and collection mechanisms.
Industrial Inputs
- Customs tariff restructuring for certain industrial goods, machinery and mineral categories, including iron ore and coal, could also lead to price increases depending on final tariff lines.
Luxury & Select Imports
- Imported alcohol, luxury watches and select high-end goods may see higher prices.
- Exemptions have been withdrawn for items where domestic production is now sufficient or import volumes are negligible.
Other Key Consumer-Relevant Changes
- The new Income Tax Act will come into effect from April 1, 2026, aimed at simplifying compliance.
- The revised return filing deadline has been extended to March 31 from December 31.
- Buying futures and options (F&O) has become more expensive as the government has increased Securities Transaction Tax (STT) on derivatives trades.
- Small taxpayers can now claim nil or rule-based tax deductions without applying for a lower withholding (lower TDS) certificate, which earlier required approval from the income tax department.
Compensation received by accident victims or their families from Motor Accident Claims Tribunal (MACT) rulings-has been made tax-exempt for individuals offering relief to beneficiaries.
For more Budget related updates follow PL Capital.
