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Budget 2026-27 Boosts Aviation: Naidu Hails Customs Duty Exemptions

Union Civil Aviation Minister Ram Mohan Naidu praised the Union Budget 2026-27 for significantly benefiting the civil aviation sector. He highlighted that customs duty exemptions on parts for civilian and trainer aircraft will boost domestic manufacturing. The Minister cited partnerships, such as Embraer with Adani and Russia with HAL, as evidence of the opportunity created by the budget's policy direction. The measures aim to address the aircraft shortage and build a self-reliant aerospace ecosystem in India.

Key Points: Budget 2026-27: Customs Duty Exemptions to Boost Aircraft Manufacturing

  • Customs duty exemption on aircraft parts
  • Push for domestic aircraft manufacturing ecosystem
  • Partnerships with Embraer and Russia
  • Focus on 'Atmanirbharta' and reducing imports
  • Boost for MRO and SEZ units
3 min read

"Civil aviation has been a major beneficiary:" Aviation Minister Ram Naidu lauds Union Budget 2026-27

Aviation Minister Ram Naidu lauds Union Budget 2026-27 for customs duty exemptions on aircraft parts, aiming to boost domestic manufacturing and 'Atmanirbharta'.

"civil aviation has been a major beneficiary - Ram Mohan Naidu"

New Delhi, February 2

Union Civil Aviation Minister Ram Mohan Naidu lauded the Union Budget for 2026-2027, emphasising that the civil aviation sector has emerged as a primary beneficiary of the government's latest fiscal roadmap.

Speaking on the long-term impact, the Union Minister noted that the government is working to establish a robust aircraft manufacturing ecosystem, highlighting that this budget provides a clear roadmap to achieve that vision.

"I am very happy to share that in today's budget speech, which has been proposed by the finance minister, civil aviation has been a major beneficiary. One of the strongest impact areas in civil aviation is the manufacturing sector, where many other countries have taken advantage. When we want to buy these planes, we are buying them from other countries and other OEMs," Naidu said.

He asserted that the focus is on 'Atmanirbharta' to bring manufacturing to the country itself.

"We have been working for quite some time now to establish this network, and this budget gives a clear picture on how to do it. The customs duty exemption on parts and components used in civilian and trainer aircraft will boost the manufacturing ecosystem, which is currently a bottleneck. We have a lot of airports here today, but there is a mismatch in the connectivity because we don't have that many planes and how do we get that many planes is to improve the manufacturing in the country," said Naidu.

The Union Minister further mentioned that the Brazilian aerospace giant Embraer is partnering with Adani Aerospace and Defence to manufacture aircraft within the country. He also noted that the Russian government is entering into a tie-up with Hindustan Aeronautics Limited (HAL), driven by the significant opportunities created by this year's Union Budget.

"There is a great opportunity here, which is why Embraer, a Brazilian company, is tying up with Adani Aerospace and Defence to manufacture aeroplanes in the country. The Russian government is also entering into a tie-up with HAL and signing an MoU to manufacture jet and propeller aircrafts in the country..." added Naidu.

Earlier on Sunday, Union Finance Minister Nirmala Sitharaman presented the Union Budget 2026-27 in Lok Sabha, her ninth consecutive Union Budget, asserting that it is driven by "Yuvashakti" and based on "three kartavyas".

Within the Civil and Defence Aviation sectors, the Budget proposes to exempt basic customs duty on components and parts required for manufacturing civilian, training, and other aircraft.

Additionally, basic customs duty on raw materials imported for the manufacture of aircraft parts used in Maintenance, Repair, and Overhaul (MRO) for Defence sector units will also be exempted. Moreover, a special one-time measure has also been proposed to facilitate sales from manufacturing units in Special Economic Zones (SEZs) to the Domestic Tariff Area (DTA) at concessional duty rates.

- ANI

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Reader Comments

P
Priya S
Good news for sure, but I really hope the focus isn't just on big corporate tie-ups like Adani. We need to ensure MSMEs in the supply chain also benefit from these duty exemptions. The success will be measured by how many small component manufacturers spring up across the country, not just by the final assembly lines.
R
Rohit P
Finally! We've been talking about making planes in India for decades. The customs duty exemption is the right push. More planes made here should mean better connectivity to tier 2 and 3 cities. Waiting for the day I can book a flight from my hometown without a 6-hour train journey to the metro first.
S
Sarah B
As someone working in the engineering sector, this is very promising. The MRO duty exemption for defence is a big deal too—it will boost our self-reliance in maintaining our own fleet. The key will be sustained policy support and skill development. We need to train a new generation of aerospace engineers and technicians.
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Vikram M
All this sounds great on paper, but will it actually make flying cheaper for us? Or will the savings from local manufacturing just become extra profit for the airlines? The budget should have also addressed the high taxes on aviation fuel (ATF) which is a huge part of ticket costs. That's the real bottleneck for common people.
K
Karthik V
The partnership with HAL is crucial. They have the experience. If we can manufacture reliable trainer and civilian aircraft here, it's a game-changer for regional connectivity under UDAN. Hope the execution is swift and transparent. Jai Hind!

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