Nagpur: The Union Budget has quietly delivered a policy push that could significantly reshape Nagpur’s industrial and aerospace landscape, with MIHAN emerging as one of the key beneficiaries of the Centre’s latest economic recalibration.
Finance Minister Nirmala Sitharaman’s decision to allow eligible manufacturing units in Special Economic Zones to sell goods in the Domestic Tariff Area (DTA) at concessional duty rates has been welcomed as a long-awaited correction, particularly for units operating in the MIHAN-SEZ, which has struggled to unlock its full potential in recent years.
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For MIHAN’s aviation ecosystem, the timing could not be more critical. The Budget has also proposed exemptions from basic customs duty on components and parts used in the manufacture of civilian, training and other aircraft, along with duty-free imports of raw materials used for making parts required in the maintenance of defence aircraft. These measures directly align with Nagpur’s growing role in aircraft manufacturing and maintenance.
The announcements come against the backdrop of Dassault Reliance Aviation Limited (DRAL) moving ahead with plans to manufacture Falcon business jets at MIHAN, while Max Aerospace has proposed a Maintenance, Repair and Overhaul (MRO) facility for military aircraft, projects that could anchor Nagpur as a national aerospace hub.
“High taxation on imported raw materials has been a persistent bottleneck for the sector,” said Bharat Malkhani, CEO of Max Aerospace, adding that the proposed exemptions would provide tangible cost relief and improve competitiveness.
The easing of SEZ sales into the domestic market also fulfils a demand long raised by Nagpur’s industry bodies. The Association of Industrial Development (AID) had earlier flagged the issue, forwarding its proposal to Union Commerce Minister Piyush Goyal through Union Minister Nitin Gadkari, said AID President Ashish Kale.
“This reform was overdue and crucial for MIHAN-SEZ,” Kale said, noting that export-oriented units have been under strain due to global disruptions. Ashish Jhagrawat, Director of M/s Moon SEZ, pointed out that geopolitical tensions, including sanctions linked to the Russia–Ukraine conflict, had sharply dented exports from several SEZs, making domestic market access vital for survival.
Under existing rules, SEZs are treated as foreign territories, meaning sales outside their boundaries, even within India, attract customs duties. The proposed concessional duty structure is expected to lower costs, improve liquidity and revive capacity utilisation for MIHAN-based manufacturers, including those in pharmaceuticals and aviation.
Beyond aerospace, the Budget has also extended duty exemptions to capital goods used in lithium-ion cell manufacturing, a move that could further strengthen Nagpur and Vidarbha’s position in emerging green industries. Surjagad Ispat Pvt Ltd has announced plans to establish what it claims will be India’s first lithium refinery in Nagpur, with battery manufacturing slated for a later phase. JSW, too, has unveiled plans for a lithium-ion battery unit at Butibori.
The ripple effect extends to the wider Vidarbha region. Sitharaman’s announcement of mega textile parks under “challenge mode” has renewed optimism around the PM-MITRA textile park at Amravati, where nearly 1,000 acres have already been allotted. “The Budget gives fresh momentum to the project,” said Prashant Mohta, President of the Vidarbha Industries Association (VIA).
In another region-specific relief, the Finance Minister announced a reduction in Tax Collected at Source (TCS) on tendu leaves, a key forest produce for Gadchiroli, benefiting unorganised traders and contractors supplying directly to beedi manufacturers. TCS on liquor and mineral sales has also been lowered, a move expected to stimulate local trade.
Taken together, the Budget signals a subtle but strategic shift towards Nagpur and Vidarbha, with MIHAN once again at the centre of the region’s industrial aspirations, this time backed by policy measures that industry believes could finally translate vision into execution.
