World over, governments are reworking trade policies to stay competitive, and India may be preparing its next big customs reset in the upcoming Union Budget 2026-27.

With over Rs 1.52 lakh crore of customs duty locked in litigation, the Centre could consider introducing a customs amnesty scheme to resolve historic disputes and provide long-awaited certainty to businesses.

As per Price Waterhouse & Co LLP, as many as 38,014 customs cases, involving duties worth Rs 1.52 lakh crore, were pending in litigation as of March 2024. Industry expectations are mounting that Budget 2026-27 could offer a one-time settlement window to close these disputes.

Gautam Khattar, Principal at Price Waterhouse & Co LLP, told PTI that the objective behind such a move would be to provide certainty and reduce prolonged legal battles. “The expectation is to close historic disputes so businesses can move forward without lingering tax risks,” he said.

Apart from dispute resolution, the government may also take the next step in customs duty rationalisation. While the Union Budget 2025-26 had already reduced the number of Basic Customs Duty (BCD) slabs to eight, including a zero-rate slab, experts believe this could be further streamlined to five or six slabs.

A key concern flagged by industry is the inverted duty structure created by India’s expanding network of free trade agreements (FTAs). The **Narendra Modi-led government has signed FTAs with countries such as New Zealand, the UK, and Oman, and negotiations are underway with blocs like the European Union and the United States.

“These FTAs have made many finished goods cheaper than the raw materials used to manufacture them domestically. It is time to revisit raw material duty rates to correct this inversion,” Khattar said.

In addition, trade facilitation measures — especially faster customs clearances — are also expected to feature prominently in the Budget, as India seeks to strengthen its position as a global manufacturing and export hub.