Aiming to boost India’s self-reliance in defence aviation, Finance Minister Nirmala Sitharaman announced a full exemption from basic customs duty on raw materials and components used for maintenance, repair, and overhaul (MRO) of aircraft by defence sector units.
“It is proposed to exempt basic customs duty on raw materials imported for manufacture of parts of aircraft to be used in maintenance, repair, or overhaul requirements by Units in the Defence sector,” said FM in her budget speech for FY27 on Sunday.
Sitharaman also proposed to exempt basic customs duty on components and parts required for the manufacture of civilian, training and other aircraft.
1 January 2026
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In FY27, the government has allocated Rs 7.85 lakh crore to Defence Ministry, up from Rs 6.81 lakh crore last year. It is the highest allocation among ministries.
