Hangar To Horizon: The Aviation Push In Budget 2026

The Union Budget 2026 marks a decisive policy shift for the aviation and aerospace sector by placing manufacturing, MRO (maintenance, repair and overhaul), and supply-chain localization at the centre of growth strategy. The most impactful element of this shift is the extension of the customs duty exemptions on aircraft parts, components, and raw materials – aimed at strengthening India's position as a global aviation manufacturing hub.

For an industry that depends heavily on precision components, specialized inputs, and global sourcing, the exemption from customs duty on key imports can significantly alter cost structures. As India prepares for a projected tripling of its commercial fleet to 2,250 aircraft by 2035¹, the Budget 2026 signals that India is no longer focusing only on airline expansion and connectivity but is now equally committed to strengthening domestic aerospace production ecosystem.