Union Budget 2026-27: Coffee At Cafes To Get Costlier?

Sonal Chikara

Would you still order your usual cup of cappuccino if it costs a little more? Decide fast, because this is about to happen. Your next cafe coffee might soon come at a slightly higher price. In the Union Budget 2026-27, the government proposes withdrawal of concession on imported coffee machines and spare parts (equipment that most cafes in India rely on for roasting, grinding, and brewing coffee). Café owners will now have to pay 10 per cent customs duty, up by 2.5 per cent from 7.5 per cent earlier for coffee machines. The question now is whether this added expense will be absorbed by businesses or passed on to customers.

Coffee At What Cost?

For some, coffee is an occasional indulgence; for some, it is a habit, and for some others, it’s a ritual not to be compromised upon. “I am a black coffee person. I wake up to coffee; if there was no coffee, I would probably be dead,” says Snehh Paul (52), Country Head of Canterbury Education Group, South Asia, an Australian university.

On the other hand, Saakshi Srivastava (24), a resident of Sector 56, Noida, says, “For me, quality and the overall experience do matter. If the price goes up by around Rs 50, I’m okay with it, as spending a little extra once in a while feels reasonable to me.” Another coffee lover, Hirendra Das (62), a resident of Sector 27, was so touchy about the finances of coffee that he declared, “If coffee becomes more expensive, I may stop drinking it. At that point, it may feel more sensible to spend money on something else. There are many coffee chains like Barista, Blue Tokai, Café Coffee Day, Starbucks, and Costa, but prices are becoming unreasonable.”

A resident of Ansal Golf Links-1, near Pari Chowk, Greater Noida, hotelier Amit Rana says, “For regular café-goers, including me, this kind of increase won’t affect how often we visit. It’s not a cost that feels too heavy.”

The Rs 300 Coffee That Once Cost Rs 90

Hirendra says, “Coffee is already expensive. One cup costs around Rs 250-300. Ideally, coffee prices should come down to Rs 100-120 per cup. Even after accounting for inflation since 2018-19, the increase should not be more than Rs 20-30.” He explained that prices also fluctuate like the stock market. “For example, an Americano, which is a very simple coffee without milk or foam, costs Rs 270–280,” says Hirendra. When cafés reopened in 2023, prices jumped to around Rs 250, which is almost a 300 per cent increase. That is how the market has changed.

Is Café Coffee Overhyped in India?

Coffee is more than just a morning ritual; it gives the kick to start the day. Some hardcore coffee lovers will have three to five cups of coffee in a day, no matter how much it costs. “Coffee is anyway overpriced and overhyped in India,” Snehh Paul says. When asked whether she would have coffee even if the cost goes up, she said she cannot survive without it. Although she adds, “I don’t like Indian coffee much. I carry my own coffee from Australia. There’s a brand called Moccona, an instant coffee. But still, at times, when I am at Starbucks or at Blue Tokai, I have an Americano.”

She further adds, “If the cost increases by Rs 50, it won’t make much difference to someone who has one coffee a week or two coffees a week. But it does make a difference to people like me who drink four, five, or even six coffees a day. In the long run, it’s almost like the cost of another coffee.”

Snehh says, “Coffee is expensive, but people are paying for the experience. Regular customers like me won’t reduce visits because of this.”