Highlights
- Union Budget 2026-27 ends customs duty exemptions for consoles on April 1.
- The withdrawal of tax breaks on imported physical media and parts reportedly aims to boost the Make in India initiative.
- Personal import duties have been cut to 10%, making consoles cheaper to buy abroad than from Indian retailers.
Indian gamers planning their next big upgrade might need to take a moment and check their bank accounts. In a significant policy shift announced by Finance Minister Nirmala Sitharaman in the Union Budget 2026-27, the government has decided to withdraw key customs duty exemptions on video game console components, imported physical media, and manufacturing parts. Effectively ending the era of tax breaks that kept the landed cost of gaming products somewhat competitive, this financial reality is set to hit retail shelves formally on April 1, 2026.
The immediate impact of this decision is a steep price hike for the consumer. Industry analysis indicates that the removal of Basic Customs Duty (BCD) exemptions will result in cost increases ranging anywhere from 18% to 28% (r/IndianGaming) for the end-buyer. This inflation won't be limited to consoles alone; it is set to affect a wide array of essential gaming products, including Graphics Processing Units (GPUs), controllers, and physical game copies for platforms like PlayStation, Xbox, and Nintendo. Previously, zero-duty imports helped offset supply chain costs, but with full customs duty rates now applicable, the rising cost for distributors will almost certainly be passed on to you.
Beyond the retail shelves, the industry side of things is taking a hit as well. The budget specifically removes exemptions previously listed under notification No. 45/2025-Customs, which allowed game developers and publishers to import items at concessional rates. This change affects two specific categories: parts used to manufacture video games and gaming software distributed on physical media like discs and cartridges.
Make in India: The Strategy Behind the Tax
Consequently, game studios importing development hardware, specialized components, or manufacturing tools will now face higher operational costs. While digital-first gamers have been spared for the moment, as no new duties currently apply to digital downloads, collectors of physical media and studios relying on imported tech are in for a rough ride.
The government’s primary rationale for this sharp pivot is to align the gaming sector with the "Make in India" initiative. By increasing the cost of imports, the policy aims to discourage reliance on foreign finished goods and pressure global tech giants to establish local assembly lines, similar to the strategy used in the smartphone market.
Microsoft
However, India currently lacks a significant ecosystem for manufacturing high-end gaming consoles or producing physical game discs. Experts predict that while this move may eventually spur local manufacturing, the short-term result will likely be a dent in consumer spending and a slowdown in the esports sector.
Interestingly, the budget also introduced a surprising contradiction for the individual traveler. While purchasing from a local store is set to become a luxury, the government has reduced the customs duty on goods imported for personal use from 20% down to 10%.
This creates a unique scenario where buying a console during an overseas trip and bringing it back personally could be significantly cheaper than buying it domestically, despite the trade-off of lacking local warranty coverage. With the April 1 deadline looming, many gamers are rushing to purchase hardware before the new rates kick in, fearing that the new duty structure will embolden scalpers to hoard stock and artificially inflate prices.
