Budget 2026: Govt to Roll Out AI-Enabled Customs Integrated System in 2 Years [Read Finance Bill 2026]

The Union Budget for the Financial Year 2026-27 was presented by Finance MinisterNirmala Sitharaman in the Lok Sabha today announced an ambitious plan for an AI-enabled platform for customs and trade facilitation, called the Customs Integrated System (CIS). The CIS will radically change the way Customs businesses operate by providing one integrated digital interface through which all data relating to customs will flow, thus enhancing efficiency, increasing transparency, and facilitating trade.

Currently, this program is part of an overall strategy to modernise and bring India’s Customs processes into alignment with best global practices for fully digitized, risk-based customs processes. The Government of India currently operates its customs processes through various and separate systems :

1. Indian Customs Electronic Gateway (ICEGATE) - This system allows for the e-filing and payment of customs duties.
2. Risk Management System (RMS) - This system allows for the risk profiling and risk-based automatic scrutiny of imports and exports.
3. Indian Customs Electronic Data Interchange System (ICES) - This is a backend system for working through the assessment and clearance of cargo.

These systems were developed at different times, operate on disparate software platforms, and do not fully integrate with each other, leading to delays, manual intervention, data fragmentation and duplicated processes. As a result, the customs process is faced with delays, manual interventions, issues with fragmentation of data, and repetitious processes.

The goal of the CIS is to provide an integrated solution designed to unify these three systems into one digital solution that automates and simplifies customs transactions, which will reduce the time required for cargo to be cleared through customs, enhance the ability of customs to target risks, etc.

What is the CIS and Why It Matters

1. Unified Platform for Customs Functions - The Customs Integrated System (CIS) is envisioned to integrate ICEGATE, RMS & ICES. The goal is to combine all processes into one unified national database that will eliminate disconnection between systems as they exist today, thus creating a seamless record of transactions, reducing inefficiency, and improving processing times.
2. A Digital Overhaul Anchored in Budget 2026 - The Government did not provide further information in the Budget 2026 about the customs IT systems; however, according to government sources, they desire to provide ease of doing business and improve trade efficiencies. Therefore, the customs system will be upgraded as outlined by the Budget Announcement.

Notably, The Central Board of Indirect Taxes and Customs (CBIC) issued an Expression of Interest at the end of 2025 to seek interested industry participants to build the CIS and evaluate interested bidders. The submission deadline has been extended to January 31, 2026 with bid openings planned for February 2, 2026. Accordingly, the fully unified system is expected to be rolled out by April 1, 2027, marking it as one of the most significant sovereign digital transformation projects in India’s indirect tax administration in recent memory.

Advantages of an AI-Enabled CIS

I. Expedited Clearance/Trade Facilitation - CIS aims to greatly reduce the amount of time it takes to get your goods cleared. According to sources, Customs would be able to integrate their two systems completely, which could result in a clearance time of 24 hours instead of what is currently an average of 2 days.

By removing system incompatibilities and automating workflows for assessment of whether goods are accurate, eligible for refunds, and whether they meet testing standards, as well as handling disputes, the overall platform is expected to greatly reduce the amount of time a person's time is spent in supporting manual intervention and addressing bureaucracy.

II. End-to-End Digitisation/Faceless Processing - The CIS is expected to enable all forms of customs procedures to be fully faceless. This is anticipated to reduce the direct amount of face-to-face interactions between customs officials and people submitting their goods, which will result in increased transparency and fewer discretionary bottlenecks.

III. More Advanced Risk Targeting Using AI - The government has not provided detail on specific AI models, but the integration of the risk management systems into a single system creates an opportunity for more advanced risk profiling to be performed utilizing machine-driven analytics. Utilizing more sophisticated tools, customs will be better able to identify high risk shipments while avoiding unwarranted inspections for goods that are not considered to be high risk.

This benefit is consistent with global studies which have demonstrated that AI driven customs risk management significantly enhances both the accuracy of detection and the operational effectiveness of customs administrations.

With the introduction of the CIS, this new platform represents another fundamental change to India’s customs administration journey, by combining its existing legacy systems onto an AI-enabled single digital platform. This represents the Indian government’s intention to improve the facilitation of trade, efficiency and transparency. This initiative will yield results with its expected implementation by April of 2027, representing a major digitisation effort in India’s history of taxation.

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