The Union Budget 2026–27 has introduced a series of changes that directly affect households and food‑related businesses across the country. While several measures focus on lowering production costs and supporting domestic manufacturing, others bring price adjustments that will impact restaurants, vendors and consumers. From cheaper biogas‑based CNG and microwave ovens to revised import limits for seafood processors, alongside a fresh rise in commercial LPG prices, the budget presents a mixed picture for the food and beverage ecosystem. Here is a complete breakdown.
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What Gets Cheaper:
1. Biogas‑Mixed CNG
The Finance Minister has proposed excluding the entire value of biogas when calculating central excise duty. This reduces the cost of producing biogas‑based CNG and improves its competitiveness against fossil fuels. The reform also strengthens the link between agriculture and clean energy, giving farmers additional income opportunities by supplying agro‑residues, cattle dung and organic waste.
2. Microwave Ovens
Microwave ovens will become more affordable as basic customs duty has been exempted on specified parts used in their manufacture. The move aims to deepen value addition within the domestic consumer electronics sector and reduce dependence on imported components, bringing down manufacturing costs.
3. Seafood Processing Inputs
To support seafood exporters, the duty‑free import limit for inputs used in seafood processing has been increased from 1% to 3%. This provides processors greater flexibility in sourcing raw materials and equipment, potentially reducing input costs and improving their global competitiveness.
What Gets Simplified:
1. Alcohol: Flat 2% TCS Rate
The Tax Collected at Source (TCS) for sellers of alcoholic liquor has been rationalised to a uniform 2%. This simplifies compliance and makes the system more business‑friendly. While it does not directly lower retail alcohol prices, it reduces administrative complexity for sellers.
What Gets Costlier:
1. Commercial LPG Cylinders
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The price of the 19‑kg commercial LPG cylinder has increased by ₹49 from 1 February 2026, bringing the new rate in Delhi to ₹1,740.50. The revision, part of the monthly price adjustment, will affect restaurants, hotels, cafés and street‑food vendors that rely heavily on LPG for daily operations. Domestic LPG cylinder prices, however, remain unchanged.
2. Coffee Roasting, Brewing and Vending Machines
The government has withdrawn existing exemptions on coffee roasting, brewing and vending machines, a move that is expected to push up the cost of such equipment. These machines are commonly used across cafés, restaurants, office spaces and commercial beverage counters, many of which rely on imported models. With the revised duty structure coming into effect, businesses may face higher investment or replacement expenses, increasing operational costs for establishments where coffee service is integral to daily operations.
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What Remains Unchanged:
1. Milk Prices
Milk prices continue to remain stable with no new revisions under the Budget 2026–27. Major dairy price adjustments were implemented in 2025, and there has been no change since the last update announced on 1 February.
How The Food Industry Reacted To Budget 2026-27
Speaking about the Budget 2026-27, Deepanshu Manchanda, MD at Zappfresh said, "The Union Budget 2026–27 makes a practical and forward-looking change for India's seafood and protein markets by increasing the duty-free import limit for specified inputs used in seafood processing from 1% to 3% of FOB export value. This step will help stabilise supply, reduce costs, and make it easier for processors and retailers to manage inventory, especially when domestic seafood availability is seasonal or uneven.
They added, "For businesses like ours, handling multiple protein categories, including seafood alongside chicken and mutton, this will bring greater flexibility in sourcing, reduce price volatility, and ensure consumers have access to quality products year-round. Seafood is part of our product range alongside chicken and mutton, and we've seen customer demand for consistent quality and variety. Import duty relaxation does not replace our strong domestic fishing base rather, it supplements it by filling supply gaps and helping maintain consistent consumer choice without large price swings."