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The Union Budget 2026–27, presented on 01 February 2026, announces a major push to modernise and simplify Customs processes, aiming to reduce delays, lower compliance costs, and strengthen India’s global trade competitiveness.

Key Customs Process Reforms in Budget 2026
Trust-Based Systems
Duty deferral period for Tier-2 and Tier-3 Authorised Economic Operators (AEOs) increased from 15 to 30 days
Same duty deferral facility extended to eligible manufacturer-importers
Advance ruling validity extended from 3 to 5 years for better business certainty

Faster & Automated Clearances
Trusted importers to get automatic clearance on arrival for goods without compliance requirements
Export cargo with electronic sealing to move directly from factory to port
Regular importers with reliable supply chains to face minimal verification

Warehouse Reforms
Shift to a warehouse operator-centric system
Self-declarations, electronic tracking and risk-based audits
Reduced officer dependency and transaction delays

Digital & AI Integration
Rollout of Customs Integrated System (CIS) as a single, scalable digital platform
Expansion of non-intrusive scanning using AI and advanced imaging
Goal to scan every container at major ports

Single-Window Clearance
Interconnected digital single-window system for multiple government approvals
Food, drugs, plant and animal product clearances to go fully digital

These reforms aim to create a predictable, transparent and technology-driven customs ecosystem, supporting exporters, importers and logistics players while boosting India’s trade efficiency.

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Transcript
00:00I propose many measures for custom processes to have minimal intervention for smoother and
00:06faster movement of goods and greater certainty to the trade. Trust-based systems. I propose to
00:14enhance duty deferral period for Tier 2 and Tier 3 authorised economic operators, known as AEOs,
00:22from 15 days to 30 days. I propose to provide eligible manufacturer importers the same duty
00:30deferral facility. This should encourage them to get themselves accredited as a full-fledged Tier 3 AEO
00:40in due course. To provide greater certainty and for better business planning, I propose to extend
00:48validity period of advanced ruling binding on customs from the present 3 years to 5 years.
00:56In the spirit of the whole of government approach,
01:05government agencies will be encouraged to leverage AEO accreditation for preferential treatment in
01:13clearing their cargo. Regular importers with trusted long-standing supply chains will be recognised in
01:22the risk system so that the need for verification of their cargo every time can be minimised. Export cargo
01:29using electronic sealing will be provided through clearance from the factory premises to the ship.
01:44For import of goods not needing any compliance, filing of bill of entry by a trusted importer and arrival of
01:53goods will automatically notify customs for completing their clearance formalities.
01:59This will enable goods to be released immediately on arrival. The customs warehouse framework will be
02:06transformed into a warehouse operator-centric system with a self-declarations, electronic tracking,
02:13and risk-based audit. These reforms will move away from the current system of officer-dependent approvals and
02:22reduce transaction delays and compliance costs.
02:25Ease of doing business. Approvals required for cargo clearance from various government agencies will be
02:37seamlessly processed through a single and interconnected digital window by the end of the financial year.
02:43The processes involved in clearance of food, drugs, plant and animal and wildlife products accounting for about 70% of
02:55interdited cargo will be operationalised on this system by April 2026 itself. For goods not having any compliance requirement, clearance will be done
03:08by customs immediately after online registration is completed by the importer subject to the payment of duty.
03:18Customs integrated system will be rolled out in two years as a single integrated and scalable
03:25platform for all customs processes. Utilisation of non-intrusive scanning with advanced imaging and AI technology for risk
03:37assessment will be expanded in a phased manner with the objective to scan every container across all the major ports.
03:47New export opportunities to support Indian fishermen to fully harness the economic value of marine resources beyond our
03:59territorial waters. The following measures will be taken. A fish catch by an Indian fishing vessel in exclusive economic zone or on the high seas will be made free of duty.
04:14The landing of such fish on foreign ports will be treated as export of goods.
04:25Safeguards will be put in place to prevent misuse during fish catch, transit or transshipment.
04:33To support aspirations of India's small businesses, artisans and start-ups to access global markets through e-commerce,
04:41I am pleased to announce complete removal of the current value cap of 10 lakh rupees per consignment on courier exports.
04:52In addition,
04:54handling of rejected and returned consignments will be improved with effective use of technology for
05:01identifying such consignments.
05:03I propose to revise provisions governing baggage clearance during international travel to address
05:11genuine concerns of passengers.
05:14The revised rules will enhance duty-free allowances in line with the present-day travel realities
05:21and provide clarity in temporary carriage of goods brought in or taken out.
05:28There are honest taxpayers who are willing to settle disputes by paying all their dues,
05:34but they get deterred due to negative connotation associated with penalty.
05:42They will now be able to close cases by paying an additional amount in lieu of penalty.
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