Budget 2026 Draws Mixed Reactions: Growth Push Welcomed, Sectoral Gaps Flagged
Industry leaders have largely welcomed Budget 2026’s emphasis on infrastructure, manufacturing, tourism and fiscal discipline, calling it a growth-oriented blueprint for the medium term. Budget 2026 combined big incentives for cloud, semiconductors, rare earths and carbon tech with sharp customs-duty cuts for nuclear, aviation, clean energy and healthcare, eased IT, export and MSME norms, raised F&O taxes, pushed rail and freight infrastructure, and selectively protected consumer goods—while largely sidestepping jobs and agriculture. However, reactions remain mixed, with some sectors praising reforms in transport, digital commerce and capital markets, while others flagged missed opportunities—particularly in affordable housing and the rising cost of market participation—as the government balances ambition with restraint.
Here are the industry reactions:
Jagannarayan Padmanabhan, senior director and global head, consulting, Crisil Intelligence:
“The Finance Minister’s announcement of seven high-speed transport corridors is critical not just for capacity creation, but for enabling technology adoption through advanced signalling, traffic management and higher-spec rolling stock. These corridors will significantly reduce inter-city travel times and support seamless multimodal people movement by integrating rail, road, metro, bus and aviation networks. Given their long gestation, success will hinge on access to long-term financing and appropriately structured moratoriums.”
Ajay Srivastava, founder, Global Trade Reform Initiative (GTRI):
“India’s Budget 2026–27 improves market access for U.S. exporters by cutting duties across aviation, nuclear energy, clean energy and healthcare. Zero-duty imports on aircraft parts, nuclear equipment, lithium-ion manufacturing inputs and medical devices lower costs and provide long-term certainty for U.S. technology and capital-goods suppliers. Taken together, these changes quietly help U.S. in capital-intensive, technology-led exports to India.”
Kinjal Shah, senior vice president and co-group head, corporate sector ratings, ICRA:
“The Union Budget for FY2027 has laid a lot of focus on indigenous manufacturing of electronics, with the increase in outlay for the Electronics Components Manufacturing Scheme to Rs. 40,000 crore from Rs. 22,919 crore. It has proposed to launch India Semiconductor Mission (ISM) 2.0 to expand India’s semiconductor sector capabilities in producing equipment and materials, designing full-stack Indian IP, and fortifying supply chains. To deepen value addition in the consumer electronics sector, it is also proposed to exempt basic customs duty on specified parts used in the manufacture of microwave ovens.”
Shripal Shah, managing director and CEO, Kotak Securities:
“This is a growth-focused Budget, with strong emphasis on manufacturing, capital expenditure, and tourism to support forex inflows. The Budget also stays firmly on the path of fiscal prudence, with the glide towards a 4.4% fiscal deficit this year and 4.3% next year clearly signalling a reduction in the government’s debt and interest burden. On the capital markets side, corporate bond market-making will help deepen the debt ecosystem, while higher investment limits for persons resident outside India should support portfolio flows and strengthen India’s long-term investment appeal. Treating buybacks as capital gains for non-promoters is positive for investors. However, a steep rise in STT on futures and options will increase impact costs and could reduce derivative volumes.”
Anshul Aggarwal, partner, indirect tax, KPMG India:
“Budget 2026 marks a pivotal step toward strengthening India’s digital commerce ecosystem. By effectuating the need for simpler and clearer compliance structures for marketplace intermediaries, the Budget addresses a long-standing operational challenge for the sector. In addition, the Budget reinforces the government’s commitment to empower small sellers by bolstering India’s e‑commerce ecosystem. By prioritising the integration of SMEs into digital marketplaces, the Budget advances the broader agenda of democratising market access and driving inclusive growth.”
Anuj Puri, chairman, ANAROCK Group:
“Union Budget 2026-27 focused on sustained economic growth, infrastructure development, MSMEs, tourism, high-speed rail corridors, and manufacturing. From a real estate perspective, it has delivered limited direct but various indirect benefits - acting more as a growth catalyst than an instant rescue cavalry. One major disappointment for the real estate sector was that there were no major announcements for affordable housing, which has been in free fall since the pandemic. ANAROCK data indicates that the sales share of affordable housing plummeted after the pandemic, from over 38% in 2019 to 26% in 2022 to just around 18% in 2025. The affordable housing segment was in express need of direct intervention by way of interest stimulants for buyers and developers of affordable housing. The segment needed high-impact measures.”
Vandana Singh, chairperson, aviation cargo Federation of Aviation Industry in India (FAII):
“The Union Budget 2026–27 reflects a measured and structurally focused approach to strengthening India’s freight ecosystem. The continued investment in Dedicated Freight Corridors, the plan to operationalise 20 new National Waterways, and the Coastal Cargo Promotion Scheme targeting an increase in waterways and coastal shipping share from 6% to 12% by 2047 collectively signal an intent to rebalance cargo movement towards more cost-efficient and sustainable modes. Equally important are the proposed customs reforms, including AI-enabled risk assessment, faster clearances, and a unified digital window, which should improve predictability and reduce dwell times for cargo operators. Overall, the budget appears to prioritise long-term efficiency and competitiveness across India’s cargo and supply chain infrastructure.”
Aloke Singh, managing director, Air India Express:
“The Union Budget 2026–27 sends a strong and reassuring signal for India’s long-term growth, anchored in fiscal discipline and a sustained push on infrastructure-led development. The Budget’s focus on strengthening medical value tourism and destination development is particularly relevant for aviation, as it creates high-frequency, purpose-driven inbound travel, especially from regions such as the Middle East and Southeast Asia. At the same time, the emphasis on developing heritage, archaeological, and eco-tourism destinations across multiple states will stimulate demand for air connectivity to Tier II and Tier III cities, supporting the next phase of domestic aviation growth. Importantly, the parallel focus on skilling and professionalising the hospitality and tourism workforce addresses the capacity and service-quality requirements needed to sustain this growth. Taken together, these measures create an ecosystem in which airlines like Air India Express are well positioned to play a meaningful role.”
C.S. Vigneshwar, president, Federation of Automobile Dealers Associations (FADA):
"The Union Budget 2026-27 presents a robust roadmap for the various sectors’ transition toward a sustainable and technologically advanced future. We particularly welcome the government's commitment to the electric vehicle (EV) ecosystem by extending basic customs duty exemptions for capital goods used in manufacturing Lithium-Ion Cells. This, combined with the establishment of Rare Earth Corridors in mineral-rich states to support permanent magnet manufacturing, will significantly bolster domestic EV production and affordability. For our dealer community, many of whom are MSMEs, the Rs 10,000 crore SME Growth Fund and the mandating of TReDS for settlement are pivotal steps toward improving liquidity and growth. Additionally, the Income Tax exemption for interest awarded by Motor Accident Claims Tribunals (MACT) is a welcome relief for individual vehicle owners and victims. Overall, this budget balances industrial scaling with consumer-centric tax reforms."
Jyoti Malhotra, managing director, Volvo Car India:
“The continued focus on maintaining and improving the current growth rate in the Union Budget 2026-27 should help the economy to enhance productivity and competitiveness by building resilience to a volatile global economy. The budget proposals are a welcome move for the entire productive sector, including the mobility sector. The maintenance and sustenance of growth will encourage consumption across the board, creating a larger market for high-value items. Coupled with ease of handling direct taxation and customs-related rules, the economy should continue in an upward trend. Overall, the measures are targeted at maintaining the momentum of the Indian economy.”
Santosh Iyer, managing director and CEO, Mercedes-Benz India:
“Budget's strong focus on infrastructural development, with addition of Rs 1 lakh crore in capex, is a step in the right direction, developing the country’s evolving mobility ecosystem. Better highways and improved intercity connectivity have historically driven luxury car demand in India. The fiscal prudence reflected in the 4.3% deficit target, combined with a strong focus on exports, sends a strong signal of macroeconomic stability, which may lead to a less volatile currency. Overall, the emphasis of the budget is on strengthening the ease of doing business, and the deferral of customs duty payments up to 30 days can improve cash flow significantly. This budget primarily focuses more on long-term gains, rather than immediate ones.”
Anshuman Magazine, chairman and CEO - India, South-East Asia, Middle East and Africa, CBRE:
"The Budget strongly reflects the Government’s ambition to accelerate and sustain economic growth through manufacturing and improving effectiveness. The decision to include assets of Central Public Sector Enterprises (CPSEs) into the Real Estate Investment Trust (REIT) structure is a significant shift and is likely to have a multi-layered impact on the market, from deepening the market, as these entities have large assets, to increasing the participation of institutional investors, including mutual funds. The tax holiday for foreign cloud companies setting up data centres here till 2047 is likely to remove the single biggest friction point for global hyperscalers entering India. This is likely to act as a massive catalyst for the asset class. We expect global capital inflows into the sector to increase substantially after this announcement.”
This article was originally published in The Core
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