I want to load a local html file through chrome custom tab, is that workable?

Actually there is a way. in AndroidManifest.xml

    <provider
        android:name="androidx.core.content.FileProvider"
        android:authorities="${applicationId}.provider"
        android:exported="false"
        android:grantUriPermissions="true">
        <meta-data
            android:name="android.support.FILE_PROVIDER_PATHS"
            android:resource="@xml/provider_paths" />
    </provider>

define provider paths

<?xml version="1.0" encoding="utf-8"?>
<paths>
<external-path
    name="external_files"
    path="." />
</paths>

And then just extract your local file to external dir

val file = File(activity.externalCacheDir, "hello.html")
        val bytes = resources.openRawResource(R.raw.hello).use { it.readBytes() }
        FileOutputStream(file).use { it.write(bytes) }
        val uri = FileProvider.getUriForFile(activity, "${activity.packageName}.provider", file)
        CustomTabsIntent.Builder()
            .build()
            .also { it.intent.addFlags(Intent.FLAG_GRANT_READ_URI_PERMISSION) }
            .launchUrl(activity, uri)

No, it is not possible to open file:// URLs in customtabs.