Budget 2026-2027: Logistics, Supply chain & Infrastructure note

BUDGET 2026-2027: LOGISTICS, SUPPLY CHAIN & INFRASTRUCTURE NOTE

Executive Summary The Budget 2026-27 emphasizes reducing logistics costs and building supply chain resilience through a capital expenditure strategy targeting ₹12,21,821 crore. The focus spans multi-modal connectivity (Road, Rail, Water), domestic manufacturing of logistics assets (containers, ships), and significant customs modernization to facilitate trade.

1. Transportation Infrastructure (Hard Assets)

A. Road Transport & Highways

• Total Allocation: The Ministry of Road Transport and Highways has been allocated ₹3,09,875.30 crore for BE 2026-27.
• NHAI Investment: The National Highways Authority of India (NHAI) investment is estimated at ₹1,87,293.16 crore.
• Road Works: A specific allocation of ₹86,125 crore is made for works under the Roads Wing.
• Border Infrastructure: Capital outlay for border infrastructure and management is set at ₹5,577 crore.
• Maintenance: Maintenance of National Highways financed from the Central Road and Infrastructure Fund (CRIF) is allocated ₹5,020 crore.

B. Railways

• Freight Corridors: A new Dedicated Freight Corridor is proposed to connect Dankuni (East) to Surat (West).
• High-Speed Rail: Seven new corridors are proposed as "growth connectors," including Mumbai-Pune and Delhi-Varanasi.
• Key Budget Estimates (BE 2026-27):
  
  • Rolling Stock: ₹52,109 crore.
  • New Lines: ₹36,722 crore.
  • Doubling of Tracks: ₹37,750 crore.
  • Track Renewals: ₹22,853 crore.

C. Coastal & Inland Waterways

• Modal Shift Target: The government aims to increase the share of inland waterways and coastal shipping from 6% to 12% by 2047 through a new Coastal Cargo Promotion Scheme.
• New Waterways: Operationalisation of 20 new National Waterways (NW) over the next 5 years. Priority is NW-5 in Odisha (Talcher/Angul to Paradeep/Dhamra ports) for mineral logistics.
• Shipbuilding & Repair:
  
  • Maritime Development Fund: Established with ₹1,000 crore.
  • Shipbuilding Financial Assistance Scheme: Allocated ₹515 crore.
  • Repair ecosystems to be set up at Varanasi and Patna.

2. Supply Chain Resilience & Manufacturing

To reduce dependency on foreign logistics assets and secure critical supply chains:

• Container Manufacturing: A specific scheme with a budgetary allocation of ₹10,000 crore over 5 years to create a global container manufacturing ecosystem.
• Industrial Corridors:
  
  • East Coast Industrial Corridor: Proposed with a node at Durgapur.
  • NICDIT: The National Industrial Corridor Development and Implementation Trust is allocated ₹3,000 crore.
  • Plug and Play Industrial Parks: A new scheme allocated ₹3,000 crore.
• Semiconductors: India Semiconductor Mission 2.0 launched with an initial ₹1,000 crore allocation to fortify supply chains and produce equipment/materials.
• Critical Minerals: Establishment of Rare Earth Corridors in Odisha, Kerala, Andhra Pradesh, and Tamil Nadu for mining and processing.

3. Export-Import (EXIM) & Trade Facilitation

A. Customs & Logistics Policy Reforms

• Courier Exports: The value cap of ₹10 lakh per consignment on courier exports is completely removed to boost e-commerce exports.
• Duty Deferral: The deferral period for Tier 2 and Tier 3 Authorised Economic Operators (AEOs) is increased from 15 days to 30 days.
• Advance Ruling: Validity period extended from 3 years to 5 years to provide business certainty.
• Digital Clearance: A Single Window system for clearances (food, drugs, plant, animal products) to be operational by April 2026.
• Scanning Technology: Deployment of non-intrusive AI-based scanning to achieve 100% container scanning at major ports.

B. Export Promotion Schemes (Financials)

• RoDTEP: Remission of Duties and Taxes on Exported Products allocated ₹10,000 crore.
• RoSCTL: Rebate on State and Central Taxes and Levies (Textiles) allocated ₹5,000 crore.
• Export Promotion Mission: Allocated ₹2,300 crore.

C. Sector-Specific Duty Changes

• Marine Exports: Duty-free import limit for inputs used in seafood processing increased from 1% to 3% of the previous year's export turnover.
• Leather/Footwear: Duty-free import of specified inputs extended to Shoe Uppers; export period for duty-free inputs extended from 6 months to 1 year.
• Warehousing: Safe harbour provision for non-residents for component warehousing in bonded zones with a profit margin fixed at 2% of invoice value.

4. Aviation Logistics

• Maintenance, Repair, and Overhaul (MRO): Basic customs duty exemption on raw materials/parts for aircraft MRO imported by Defence PSUs.
• Manufacturing: Exemption of basic customs duty on components for the manufacture of civilian and training aircraft.
• Seaplanes: Introduction of a Seaplane Viability Gap Funding (VGF) Scheme to enhance remote connectivity.

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