Industrial Policy & Trade Monitor· 2667 actions· ✨ 89 recent

On 1 February 2026 Finance Minister Nirmala Sitharaman tabled India's Union Budget 2026-27, with Customs Notification No. 02/2026-Customs (dated 1 Feb 2026, effective 2 Feb 2026) implementing the customs-duty package. The notification zero-rates basic customs duty (BCD) on (i) capital goods imported for domestic processing of critical minerals — crushing, beneficiation, refining, chemical-processing, separation/purification, and metallurgical/alloy-making equipment; (ii) capital goods for lithium-ion cell manufacturing for battery energy storage systems (BESS), extending the 2024-25 EV-cell exemption to stationary storage; and (iii) twelve additional critical minerals plus cobalt powder and lithium-ion battery scrap, on top of the 25 critical minerals already exempted in the FY2024-25 budget. In parallel, critical minerals (including monazite / rare-earth concentrate) are migrated from the customs-exemption notification mechanism into the First Schedule of the Customs Tariff Act at Nil BCD, effective 1 May 2026 — a tariffisation step that locks the rate into primary legislation rather than annually renewable notification. The Budget also commits to dedicated critical-mineral / rare-earth-magnet processing corridors in Andhra Pradesh, Odisha, Kerala and Tamil Nadu. Structurally this is the fiscal/tariff layer underneath the National Critical Mineral Mission (NCMM, Jan 2025) and the National Manufacturing Mission (Feb 2025): NCMM funds capex and overseas asset acquisition (₹34,300 cr), this Budget removes the import-duty drag on the equipment needed to actually run domestic processing lines. It complements the REPM scheme (Nov 2025) for sintered rare-earth magnets and Semicon Mission 2.0 (Feb 2026) on the demand side for refined critical minerals.

On 1 February 2026 India's Ministry of Finance tabled the Finance Bill 2026 alongside Customs Notifications 01/2026 to 03/2026-Customs, restructuring the customs tariff schedule across hundreds of HS lines. Duty rates rise on a range of consumer and finished-goods lines (e.g. umbrellas: 20% to "20% or ₹60/piece, whichever is higher"; potassium hydroxide: 0% to 7.5%; INVAR steel: 5% to 7.5%; radio-trunking parts: 5% to 15%; video-game parts: 5% to 20%) while falling on nuclear and renewable-energy inputs (fuel elements and control/absorber rods for nuclear reactors: 7.5% to 0%; sodium antimonate for solar glass: 7.5% to 0%) and on personal-use dutiable imports under heading 9804 (20% to 10%, effective 1 April 2026). Roughly 80 exemptions previously granted by standalone notification are being written into the First Schedule of the Customs Tariff Act at unchanged rates, effective 1 May 2026 — converting administratively-reversible exemptions into statutory ones.

The Government of India, exercising powers under Section 11C of the Mines and Minerals (Development and Regulation) Act, 1957, amended the First Schedule on 29 January 2026 to add "Coking Coal" explicitly to Part A (Coal expanded to "Coal, including Coking Coal") and to Part D (Critical and Strategic Minerals list). The designation transfers exclusive auction authority over coking coal mining blocks from state governments to the Central Government and extends the existing EIA public-consultation exemption — previously applicable to atomic and strategic minerals — to coking coal projects. India imports approximately 80% of its coking coal requirements (primarily from Australia, the United States, Russia, and Canada); the classification is the statutory pathway to fast-track domestic exploration, NMEDT funding eligibility, and KABIL-backed overseas-acquisition mandates for coking coal.

On 27 January 2026 the European Union and India announced the conclusion of negotiations on a comprehensive Free Trade Agreement at the EU-India summit hosted at Hyderabad House in New Delhi, attended by PM Narendra Modi, Commission President Ursula von der Leyen and Council President António Costa. The deal — described by both leaders as the "mother of all deals" — covers ~25% of world GDP and ~2 billion people. The EU eliminates duties on 91% of tariff lines (covering 99.3% of bilateral trade by value); India eliminates duties on 86% of lines (covering 96.6% by value). Headline cuts include Indian tariffs on EU wines (150% → 75% at entry into force, falling to 20%), olive oil (45% → 0% over five years) and processed agri-food (up to 50% eliminated); EU tariffs are reduced/eliminated on Indian textiles, leather/footwear, gems and jewelry, marine products, tea, coffee, spices and certain agricultural and steel products. The agreement still requires Council adoption, European Parliament consent and approval by India's Union Council of Ministers; entry into force is expected in early 2027. Companion instruments concluded at the same summit include an EU-India Security and Defence Partnership and a Mobility and Migration Agreement.