Union Budget 2026: What It Means for Logistics and Supply Chains

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Union Budget 2026: What It Means for Logistics and Supply Chains

The logistics sector has quietly become one of India’s biggest competitiveness levers—because every hour saved at a port gate and every kilometre shifted to cheaper, cleaner modes shows up in delivered costs. 

In Budget 2026–27, Finance Minister Nirmala Sitharaman proposes tilt the sector towards three outcomes: greener freight routes, faster clearances, and manufacturing-linked Logistics—all aimed at making supply chains more reliable and export-friendly.

Greener freight and new corridors

A key thrust is sustainable cargo movement through fresh capacity and modal shift. The Budget proposes new Dedicated Freight Corridors connecting Dankuni in the East to Surat in the West. It also outlines plans to operationalise 20 new National Waterways over the next five years, starting with NW-5 in Odisha, which will connect mineral-rich zones such as Talcher and Angul to the ports of Paradeep and Dhamra. To support inland shipping, a ship repair ecosystem is planned at Varanasi and Patna. The coastal push is explicit too: a Coastal Cargo Promotion Scheme targets a modal shift towards inland waterways and coastal shipping, with an ambition to raise their share of cargo movement from 6 per cent  to 12 per cent  by 2047.

Faster borders and lower friction

On trade facilitation, the Budget targets “minimal intervention” customs. Cargo clearances are proposed to move through a single interconnected digital window, with processes for food, drugs and animal products—often a major cause of cargo interdictions—planned to be operational by April 2026. Port efficiency is also addressed through expanded non-intrusive scanning using advanced imaging and AI-led risk assesSMEnt, with the goal of scanning every container across major ports in phases. Customs warehousing is set to shift to a warehouse operator-centric framework using self-declarations and electronic tracking to reduce delays and costs.

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Manufacturing-linked logistics

To support electronics supply chains, the Budget proposes a safe-harbour for component warehousing in bonded warehouses at a 2 per cent  margin, and a five-year income Tax exemption for non-residents providing capital goods or tooling to toll manufacturers in bonded zones. A Rs 10,000 crore container manufacturing scheme over five years adds an industrial layer to the logistics push. Overall, the transport sector has been allocated Rs 5,98,520 crore in Budget Estimates for 2026–27.

Dedicated Freight Corridors

It proposes new Dedicated Freight Corridor(s) to connect Dankuni (East) with Surat (West).

 

Companies to focus: Container Corporation Of India Ltd, Delhivery Ltd, Blue Dart Express Ltd.