Union Budget 2026: What Gets Cheaper and What Gets Costlier for You

India’s Union Budget 2026–27, presented by Finance Minister Nirmala Sitharaman, didn’t just set fiscal priorities for the coming year, it also shifted the price balance on many essential and consumer goods by changing taxes and customs duties. These changes have direct consequences for everyday consumers, industries and importers alike.

Let’s break down which items are expected to become cheaper and which may see price increases as a result of the new budget.

Items That Are Expected to Get Cheaper

The government has cut or exempted customs duty and made other tax changes that are likely to reduce retail prices on a range of goods, especially where importing parts or raw materials plays a role.

1. Essential Medicines

• Customs duty exemptions on 17 cancer drugs and medicines for rare diseases will lower treatment costs.
• Medicines for diabetes and other chronic conditions are also included in these duty reliefs.
  This aims to reduce the financial burden on patients needing ongoing treatment.

2. Consumer Electronics and Appliances

Several everyday electronics could see price relief due to lower duties on components:

• Smartphones and mobile devices — duties on components and capital goods are cut to support domestic manufacturing, which could bring prices down.
• Microwave ovens — exemption on basic customs duty for parts may reduce production cost.
• Solar panels and related equipment — duty reductions for renewable energy components support cleaner power options at lower prices.
  These changes encourage local value addition while making devices more affordable.

3. Electric Vehicle Batteries

The budget exempts basic customs duty on lithium-ion (Li-ion) cells used for EV batteries and related components.
This tax move is designed to lower the cost of electric vehicles and battery storage systems, aligning with India’s green mobility goals.

4. Personal Imports and Overseas Spending

• Customs duty on all dutiable goods imported for personal use is reduced from 20% to 10%, which may cut costs for travelers buying products abroad.
• Tax Collected at Source (TCS) on overseas education and tour packages is also lowered, making foreign study and travel cheaper.

5. Leather and Related Goods

• Reduced duties on raw materials like leather and select textiles are expected to lower manufacturing costs, potentially making finished leather products (bags, belts, footwear) more affordable.

6. Sports and Maritime Items

• Certain sports equipment sees duty relief to encourage youth participation.
• Inputs for seafood processing have higher duty-free import limits, helping both producers and consumers.

Items That Are Likely to Get Costlier

Not all changes are in favor of lower prices. Some taxes were increased or exemptions removed, which will raise costs for specific goods and activities.

1. Alcohol and Sin Goods

• Alcoholic beverages face a higher Tax Collected at Source (TCS), increasing by one percentage point.
• Traditional tobacco products like cigarettes, beedis, pan masala and gutka also become more expensive with increased duties, reflecting health-oriented tax policy.

2. Luxury and Imported Goods

• Luxury watches and premium imported items are expected to get costlier due to higher tariffs and protection for domestic manufacturing.
• Some consumer electronics imported as finished products may rise in price due to global supply pressures and tariff structures.

3. Specific Industrial Changes

• Higher duties on certain industrial imports, for example, upgraded customs tariff rates for goods like potassium hydroxide and umbrella components, may push up their prices.
• Stock market trading costs also rise, with increases in Securities Transaction Tax (STT) on futures and options, affecting active traders.

Why These Changes Matter to You

The Union Budget 2026 indicates a broader policy direction:

• It eases costs on healthcare and essential goods, helping families with long-term treatment expenses.
• It promotes clean technology and mobility by making EV batteries and renewable energy components more affordable.
• It supports Make in India goals, by lowering duties on parts and materials, but not on finished luxury imports.

Meanwhile, higher taxes on sin and luxury goods show a policy tilt toward promoting health and revenue sustainability.

The net effect is a mixed consumer landscape that balances relief in critical areas with targeted cost increases in goods that either carry social burdens (like tobacco) or strategic protective tariffs.