Industry Reacts to Union Budget 2026-27

Focuses on long-term economic growth

We welcome the government’s consistent focus on long-term economic growth and structural transformation in the Union Budget 2026-27. The record INR 12.2 lakh crore capital expenditure allocation, sustained emphasis on infrastructure development, and a fiscal deficit target of around 4.3% reflect a continued and disciplined approach to strengthening India’s growth foundations.

The budget’s focus on technology-led manufacturing, digital infrastructure such as data centers, and next-generation mobility including high-speed rail supports India’s ambition to become a global innovation and manufacturing hub. Continued support for MSMEs, skilling, and ease of doing business will be critical in ensuring that growth is broad-based and resilient. As industries navigate rapid technological change, the government’s spotlight on scale, execution, and investments in connectivity, smart infrastructure, and talent development provides a clear and credible roadmap for sustainable and inclusive growth.

– Sunil Mathur, MD and CEO, Siemens Limited

Budget 2026 takes a structured approach to strengthening MSMEs by addressing three persistent gaps – equity, liquidity, and capability

Budget 2026 takes a structured approach to strengthening MSMEs by addressing three persistent gaps – equity, liquidity, and capability. Measures such as the SME Growth Fund, stronger invoice-based financing through TReDS, and professional support via Corporate Mitras are aimed at improving cash-flow predictability and execution capacity, particularly beyond the metros.

This is less about short-term stimulus and more about building systems that allow manufacturing and construction MSMEs to scale with discipline.

– Gaurav Sachdeva is the Joint Managing Director and CEO of JSW One Platforms Limited

Gives a vital boost to the entire defence manufacturing ecosystem

In my view, today’s Budget announcement gave a timely & vital boost to the entire defence manufacturing ecosystem. The most significant one was the recognition of critical minerals and materials science as core enablers of strategic, frontier sectors like aerospace and defence. The proposal to set up Rare Earth Corridors in critical mineral belts will ensure that domestic defence manufacturers and OEMs can bank on a robust ecosystem for mining, processing, research and manufacturing within the country.

MSMEs play a key role in manufacturing for the defence sector. Supporting them with the ₹10,000 crore SME Growth Fund and the ₹2,000 crore top-up of the Self-Reliant India Fund will not only help them maintain liquidity and hedge risk but also enable them to augment their capabilities to innovate for the sector. The creation of planned academic zones around major industrial corridors, along with a focus on dedicated research and training centres, will not only enable closer research-to-field collaboration & acceleration, but also foster a workforce skilled in future tech. Customs duty exemption for raw materials imported to manufacture MRO-related parts and the overall push to deepen domestic manufacturing of aviation components and parts, including for defence-related needs, is a much-needed move towards India’s Viksit Bharat and self-reliance goals.

With an expansion in the budgetary allocation towards defence, from FY 2025-26, we look forward to a year of intense activity in every area of defence modernisation.

– Subbu Venkatachalam, Head of Defence & Aerospace, Carborundum Universal Limited

Provides a strong and sustained policy signal for the expansion and modernisation of power transmission ecosystem

The Union Budget 2026–27 provides a strong and sustained policy signal for the expansion and modernisation of India’s power transmission and infrastructure ecosystem. The continued thrust on public capital expenditure, development of new Dedicated Freight Corridors, creation of city economic regions, and targeted investments to ensure long-term energy security are critical enablers for strengthening the national grid and supporting India’s growing power demand. Measures such as the proposed Infrastructure Risk Guarantee Fund and accelerated asset monetisation through REITs are expected to improve financing confidence, reduce execution risks and facilitate timely completion of large-scale EPC projects. For Jyoti Structures, with a proven track record in executing extra high-voltage transmission lines, substations and turnkey grid projects across India and international markets, the Budget creates a conducive environment to support grid expansion, renewable energy integration and cross-regional connectivity, while reinforcing India’s broader electrification and infrastructure development priorities.

– Rajesh Kumar Singh, CEO, Jyoti Structures Ltd.

The Budget sends a positive message to manufacturing

The Union Budget 2026 sends a positive message to India’s manufacturing and machine tool industry. Continued emphasis on infrastructure development, Make in India, and investments in advanced, especially AI-driven manufacturing, will strengthen domestic capabilities and global competitiveness.The announcement of a ₹10,000 crore SME Growth Fund by Finance Minister Mrs. Nirmala Sitharaman is particularly encouraging, as it will improve credit access and support the modernisation of industrial clusters, thereby catalysing the development of the entire sector.

For the cable carrier and motion control solutions industry, the focus on smart factories, robust logistics expansion, and capital goods growth is encouraging, as it will create sustained demand for reliable, high-performance systems.

At Kabelschlepp India, a member of the Tsubaki Group, we view this budget as a strong growth proponent that will accelerate technology adoption, localisation, and long-term growth across the industrial value chain.

— Mr. Srinivas P. Kamisetty, Managing Director, Kabelschlepp India Private Limited, a member of the Tsubaki Group

Reducing customs duty on capital goods for lithium-ion batteries will help lower costs

India’s electric two-wheeler segment has gained strong momentum, and the Union Budget 2026–27 takes a step toward scaling it into a full industrial ecosystem. Focusing on rare earth magnets and dedicated corridors in mineral-rich states is crucial to secure the materials that power electric drivetrains. Reducing customs duty on capital goods for lithium-ion batteries will help lower costs and support local manufacturing. India Semiconductor Mission 2.0 and the enhanced Electronics Component Manufacturing Scheme will strengthen supply chains, promote full-stack Indian IP, and accelerate battery and component localisation. This is pleasing to see how the government focuses on MSMEs—through credit guarantee support of ₹10,000-crore SME Growth Fund, it will further empower companies like ours to expand capacity, innovate faster, and compete globally. For Zelio, these measures provide a clear and stable pathway to scale Make in India electric two-wheelers that are affordable, reliable, and designed for mass adoption across Tier II, Tier III, and emerging markets. As the ecosystem matures, further momentum can be unlocked through targeted PLI support for battery cells and motor controllers, along with rationalisation of GST on electric two-wheelers to enhance affordability and widen consumer access.

– Kunal Arya, Co-founder & MD, Zelio E Mobility

Encouraging that the Budget has increased the safe harbor limit

It is really encouraging that the Union Budget has increased the safe harbour limit to Rs 2,000 crore. Making it an automatic, rule-based model will simplify the process, save time, and reduce effort for companies. This streamlines accounting, tax, and compliance and also gives IT companies confidence to grow their business in India and contribute more to the country’s IT infrastructure. On top of that, the tax holiday for foreign companies with data centres here shows that India is creating a welcoming environment for international investment. The proposal to increase funding for industry-linked labs in tier 2 and tier 3 cities by 20 percent is another positive step, as it will open up more opportunities for emerging technologies and help nurture innovation across the country.

– Girish Hirde, Global Delivery Head at InfoVision

Positive step towards strengthening India’s semiconductor ecosystem

India Semiconductor Mission 2.0, announced in the Union Budget 2026, is a positive step towards strengthening India’s semiconductor ecosystem. We are proud to contribute through our growing capabilities designed to accelerate research and innovation in partnership with industry and academia.

– Avi Avula, President, Applied Materials India

Designed to strengthen domestic manufacturing

We welcome the Union Budget 2026–27’s focus on strengthening the MSME and manufacturing ecosystem, including the ₹10,000 crore MSME Growth Fund and the ₹4,000 crore top-up to the Self-Reliant India Fund, which will provide vital capital support for enterprises to scale and compete globally. With over 5.9 crore registered MSMEs employing 25 crore people, contributing nearly 37 % to manufacturing output and 45 % to exports, these measures are critical for driving inclusive industrial growth. We also applaud the Government’s initiative to set up a High-Powered ‘Education to Employment and Enterprise’ Standing Committee, which will focus on linking education, entrepreneurship, and employment, assessing emerging technologies like AI, and recommending measures to enhance skills and productivity. This integrated approach is expected to strengthen domestic manufacturing, improve workforce readiness, and create sustainable employment opportunities across sectors.

– Hemant Sapra, President, Global Sales & Marketing, KARAM Safety

A fundamental shift in India’s clean energy trajectory

The announcements around ISM 2.0, electronics manufacturing, critical minerals, and rare earth corridors signal a fundamental shift in India’s clean energy trajectory. For the solar sector, this goes far beyond capacity expansion toward building deep technological sovereignty. India is moving from being a hardware assembler to owning critical layers of the energy-tech IP stack—control systems, forecasting platforms, and grid software that power modern solar and storage ecosystems.

The rare earth corridors address a hidden but critical solar bottleneck by securing access to materials essential for high-efficiency motors, power electronics, and advanced energy systems, significantly reducing strategic dependence on China. Complementing this, customs duty exemptions for critical mineral processing, lithium-ion cell manufacturing for storage, and inputs like sodium antimonate for solar glass strengthen domestic value chains across materials, components, and technology—forming the backbone of India’s long-term energy transition and energy security infrastructure.

– Amod Anand, Co-Founder & Director, Loom Solar.

A comprehensive and forward-looking framework

We see the Union Budget 2026-27 as a comprehensive and forward-looking framework for strengthening India’s textile ecosystem, particularly through its integrated approach to fibers, manufacturing, skilling and sustainability. The proposed National Fibre Scheme, with its focus on man-made fibres alongside natural and new-age fibres, is a timely recognition of how the global textile industry is evolving and of India’s growing role within it.

We believe initiatives such as the Textile Expansion and Employment Scheme and SAMARTH 2.0 can play a meaningful role in modernising clusters, upgrading technology and building a skilled workforce aligned with industry requirements. For manufacturers, this emphasis on capital support, testing infrastructure and skilling is critical to improving productivity, quality and global competitiveness.

For a company like Filatex India Ltd., which operates at the upstream end of the man-made fibre value chain, these measures support a more robust downstream ecosystem, improve demand visibility and encourage long-term investments in capacity, quality and value-added products. The emphasis on the Text-ECON initiative further reinforces the industry’s shift towards sustainable and globally competitive textiles, a direction that is closely aligned with Filatex’s ongoing focus on circular recycling, responsible manufacturing and traceability through its Ecosis sustainability platform.

Overall, we believe the Budget lays a strong foundation for a more resilient, globally competitive and sustainable textile industry, encouraging capability building and investment across the value chain.

– Madhu Sudhan Bhageria, Chairman and Managing Director, Filatex India Ltd.

Marks a significant change in India’s electronics and semiconductor journey

Union Budget 2026 marks a significant change in India’s electronics and semiconductor journey, shifting the focus from capacity creation to long-term capability development. The introduction of the Indian Semiconductor Mission 2.0 and the launch of the Shakti initiative, coupled with an enhanced financial outlay of Rs 40,000 crore, further strengthen the ecosystem and reflect the government’s commitment to building a future-ready ecosystem across equipment, materials, full-stack IP, and resilient supply chains.

The focus on domestic component manufacturing, R&D, and workforce upskilling is a critical step towards strengthening India’s position in the global electronics value chain. These measures will reduce import dependence and create the foundation for innovation-led, sustainable growth.

India’s next phase of progress will be driven by companies that integrate design, engineering, and advanced manufacturing at scale, for which Budget 2026 lays the groundwork. This transition reinforces India’s ambition to emerge as a global hub for electronics and semiconductor innovation.

– Nikita Kumawat, Co-Founder and Executive Director, Brandworks Technologies

Supports emerging sectors like alternative and clean fuels, nuclear power and steel

What stands out from this Budget is the continuity in supporting sectors that require sustained capital investment and long-term planning. There is a clear acknowledgement of emerging areas such as alternative and clean fuels, alongside core segments like nuclear power and steel. For industries that operate on long execution cycles, policy stability and public investment provide the confidence needed to plan capacity, deepen localisation, and strengthen manufacturing capabilities over time. Equally important are the customs reforms announced, particularly the move towards automated, trust-based clearance and reduced compliance touchpoints, which will meaningfully improve ease of doing business & reduce transaction timelines for manufacturers.

The approach to the energy transition also appears balanced and practical. Clean energy solutions such as biomass and waste-to-energy are being recognised for their ability to address emissions, rural income generation, and energy availability together. When combined with nuclear power as a stable, low-carbon baseload and steel as the backbone of infrastructure development, this creates a more integrated energy and manufacturing framework. Looking ahead, such alignment between policy intent and industrial needs, supported by smoother trade facilitation, should help attract long-term investment, improve domestic competitiveness, and support steady, sustainable growth across the sector.

– K.L. Bansal, Chairman and Managing Director, DEE Development Engineers

A blueprint for long-term resilience rather than a set of one-off announcements

From a manufacturing and industry standpoint, the Union Budget 2026 is a blueprint for long-term resilience rather than a set of one-off announcements. The launch of ISM 2.0 and the expanded focus on electronics and capital goods signal a clear intent to build indigenous depth across the industrial value chain. What is particularly encouraging is the practical attention given to the revival of 200 legacy industrial clusters and the robust support for MSMEs through the new SME Growth Fund and enhanced liquidity measures. These interventions, coupled with the push for infrastructure in Tier 2 and 3 regions, will create a more inclusive manufacturing ecosystem that can scale beyond the metros.

The Budget also reflects a steady commitment to India’s green growth, with strategic measures for energy storage, CCUS, and nuclear power. At Danfoss India, we welcome this forward-looking vision. We remain committed to being the preferred partner in India’s journey toward competitive decarbonization, providing the energy-efficient solutions and automation technologies that enable Indian industry to do more with less.”

– Ravichandran Purushothaman, President, Danfoss India.

PRAMA India Hails Union Budget as a Progressive Roadmap to Boost the India’s electronics Manufacturing Ecosystem

We at PRAMA India hail and welcome the Union Budget 2026-2027, which has a progressive roadmap to India’s Electronics Manufacturing ecosystem. The Union Budget has a strong focus on ‘Atmanirbhar Bharat’ (Self-reliant) to give the much-needed boost to the indigenous manufacturing sector. It is a definitive budget with a “Viksit Bharat” (developed India) blueprint.

This visionary and growth-oriented budget has a strong focus on boosting the domestic manufacturing ecosystem through an expanded ₹40,000 crore outlay for electronics components.The scheme targets key components like display modules, camera sub-assemblies, printed circuit board assemblies (PCBAs), lithium cell enclosures, resistors, capacitors, and ferrites essential for consumer electronics goods and systems.

The budget aspires to give a major boost to the electronics manufacturing sector. The budget provides increased incentives for components like camera sub-assemblies, PCBAs, and sensors. The budget shows exemplary focus on AI & Technology by allocating a ₹500 crore outlay for AI centers of excellence, encouraging AI-powered surveillance. The other incentives are infrastructure growth, expanded, high-speed connectivity for rural areas and smart cities. The budget has offered customs duty exemptions on critical materials. We appreciate the budget as the government’s core intent to boost the electronics manufacturing sector.

– Ashish P. Dhakan, MD & CEO, Prama Hikvision India Pvt. Ltd.