Budget 2026 Expectations Highlights: Focus on defence, green energy, urban infra ahead of FM Sitharaman's speech

Finance Minister Nirmala Sitharaman has arrived at the Parliament and will start her Budget Speech shortly.

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“It is expected that the budget will come out with incentives which focus on chip production (rather than just assembly) and strong domestic supply chain for semiconductor industry. There should also be incentive schemes for local components, chip design and manufacturing for sustainable growth,” said Rajul Bohra, Partner, JSA Advocates & Solicitors.

"It is also pertinent that the incentives which have been committed are released faster as large fab and OSAT projects are under financial pressure. Parallel reforms under related laws are required to boost the momentum and for the nation to achieve its aim of becoming top chip manufacturing hub by 2032 and attract major financial investment in this sector," Bohra added.

“As highlighted by The Economic Survey, Union Budget 2026 is expected to bring a convergence between transfer pricing and customs valuation for related-party imports. As of now, there is not much coordination between the two as there is no anchor in the arm’s length principle. There is duplication and higher compliance which is a great burden to businesses and increases uncertainty,” said Vivek Jalan, Partner at Tax Connect Advisory Services.

“For example, in case a product is purchased by an Indian MNC from a Foreign Related party and sold to an international manufacturer and thereafter the finished product is purchased, then customs Valuation Rules for the cost of the intermediary product to be included in the value of the final product is very clear. However, Transfer pricing norms require separate bench-markings for both intermediary and final product,” he further said.

“Streamlining such kinds of valuation disputes would reinforce India’s ease of doing business landscape and its ambitions as a global manufacturing hub,” Jalan added.

“Flexible and co-working spaces are fast becoming a bellwether of India’s evolving work culture and the growth of the start-up and GCC ecosystem. In the upcoming Union Budget, the industry looks for formal recognition of flexible workspaces as a distinct real estate category, which would bring much-needed consistency in utilities, taxation, and regulatory treatment,” said Ritesh Malik, Founder, Innov8.

“We also expect targeted policy support to strengthen digital infrastructure, incentivise energy-efficient fit-outs, and enable smart building integrations—critical for creating future-ready work environments. A single-window clearance mechanism, faster project approvals and the inclusion of co-working spaces within Smart City and urban development programmes can significantly ease operational bottlenecks and accelerate supply,” Malik further said.

“Further, integrating flexible workspaces into state-level start-up and GCC policies can play a catalytic role in stimulating demand, boosting entrepreneurship and generating employment, positioning the sector as a key enabler of India’s modern, distributed workforce,” he added.

“Cyber-attacks on India’s private and public critical infrastructure, making headlines reveals vulnerabilities in it that could cripple the country’s economy and emphasize the need for cybersecurity awareness. A system that provides regular updates and audits to ensure government institutions have implemented effective cybersecurity measures should be in place by leveraging cloud-based solutions that deliver measurable outcomes,” said Dipesh Kaura, Country Director- India & SAARC, Securonix

"The government should allocate significant funds to creating awareness and development of AI-driven skills and innovation in the cybersecurity domain, ensuring a future-ready workforce. Incentivizing AI-native security products for their adoption across sectors is key to establishing a cyber-resilient digital India," Kaura added.

“As India’s digital economy continues to contribute significantly to national GDP, the 2026 budget should prioritize investments in cyber resilience to strengthen the country’s global competitiveness in digital trust and security," said Chetan Jain, Cofounder & Managing Director, Inspira Enterprise.

"With national and economic security increasingly dependent on innovative, resilient, and AI-driven solutions, the government must also allocate resources to accelerate AI-based cybersecurity R&D. In parallel, strong public-private partnerships will be critical to educate citizens and enterprises, and to improve overall cyber resilience and preparedness,” Jain added.

"India has made significant strides in expanding healthcare access through progressive reforms and public health initiatives. As we approach the upcoming Budget, we are hopeful for measures that will further enhance access to advanced therapies for millions of Indian patients who rely on public funding," said Mandeep Singh Kumar, Vice President & Managing Director, Medtronic India & Medical Technology Association of India (MTaI) member.

"By prioritizing the inclusion of innovative, evidence-based technologies within national health schemes, the healthcare system can not only keep pace with modern clinical practices but also deliver meaningful improvements to the lives of patients and their families, paving the way for a healthier future for millions across the nation," Kumar added.

"Budget 2026 has the potential to be a defining inflection point in accelerating India’s logistics transformation under the PM Gati Shakti vision. Building on the progress made in recent years, the next phase of growth will depend on deeper integration of infrastructure planning across air, road, rail, and multimodal networks, supported by faster adoption of digital platforms that enable seamless coordination across the logistics value chain. For the express logistics sector, sustained investments in airport infrastructure, cargo handling capacity, and regional air connectivity will be critical to improving turnaround times and supporting high-value, time-sensitive shipments. In parallel, wider adoption of digital enablers such as unified logistics platforms, data-driven visibility, and paperless processes - can further enhance predictability, transparency, and ease of doing business for exporters and MSMEs alike," Balfour Manuel, Managing Director at Blue Dart said.

“As sustainability becomes central to long-term competitiveness, policy levers can play a catalytic role. Differential taxation that favours greener modes of transport could accelerate modal shifts more effectively than standalone subsidies. Alongside this, focused investments in EV charging and alternative fuel infrastructure would help address practical adoption challenges, particularly across long-haul movements and urban delivery operations, enabling decarbonisation while maintaining service reliability. Continued capital expenditure on road infrastructure, especially last-mile connectivity, will further extend reliable logistics services into Tier 2, Tier 3, and rural India - strengthening MSME participation, integrating them into national and global supply chains, and supporting inclusive growth,” Manuel further said.

"A parallel focus on the logistics workforce, through skill development, stronger safety norms, and clearer frameworks for gig and delivery professionals, will be vital to building operational resilience and service quality at scale. Together, these measures can help translate the Gati Shakti vision into tangible gains for trade, exports, and national competitiveness, supporting India’s journey towards a Viksit Bharat," he added.

“India’s VDA ecosystem is at a pivotal stage, with growing adoption across the country. However, the current tax framework presents challenges for retail participants by taxing transactions without recognising losses, creating friction rather than fairness. A reduction in TDS on VDA transactions from 1% to 0.01% could improve liquidity, ease compliance, and enhance transparency while preserving transaction traceability. Raising the TDS threshold to ₹5 lakh would help protect small investors from disproportionate impact,” said Ashish Singhal, Co-founder, CoinSwitch.

“Introduced in 2022 as a stand-in for regulation at that time, VDA taxation has since been complemented by strong oversight from FIU-IND and improved compliance. This Budget presents a great opportunity to revisit the framework in a manner beneficial to both investors and the government. We remain hopeful that the government will recognize this gap and consider reviewing the current framework soon,” the CoinSwitch co-founder added.

“The Union Budget 2026 is expected to be a cautious, tightly balanced budget focused more on strategic prioritisation than big announcements. With tax revenues under pressure due to last year’s income-tax relief, the government’s major focus will be to fund rising needs, especially defence, renewable energy, and semiconductors—without breaking fiscal discipline," said Gaurav Garg, Research Analyst at Lemonn Markets Desk.

"Instead of aggressive public spending, this year's budget will likely rely on a recovery in consumption and private investment to drive growth, while keeping overall capex growth moderate. Defence, green energy, urban infrastructure, and manufacturing will see clear preference, while health, education, and traditional infrastructure get only incremental increases. Overall, Budget 2026 will emphasise disciplined spending, targeted capital allocation, and private-sector crowding,” Garg added.

“The Union Budget has a timely opportunity to view India’s tourism ecosystem- domestic, inbound and outbound as a single, integrated value chain rather than as separate segments. Connectivity will be the critical enabler of this shift, not only through infrastructure investment but through policy choices that make travel simpler, faster and more predictable," said Hemant Mediratta, Founder, One Rep Global.

“Strengthening air, rail and road access to emerging domestic destinations can help distribute demand, support regional economies and reduce pressure on traditional tourism centres. For inbound travel, expanding international air capacity, improving airport experiences and easing entry processes will be central to positioning India as a competitive, high-value global destination. Equally important is a renewed focus on destination marketing for inbound tourism, an area that has seen limited emphasis in recent years despite its critical role in shaping global perception and demand,” Mediratta further said.

"At the same time, with outbound travel from India continuing to scale, deeper international aviation partnerships and supportive frameworks can ensure Indian travellers remain well-connected to the world. A budget that aligns connectivity, destination development and ease of movement can move tourism beyond volume-led growth and position it as a strategic lever for jobs, regional development and India’s global soft power,” the One Rep founder added.

“A big win last year was seeing significant GST reduction in the nutrition space. With our upcoming Union Budget, we hope to see this momentum build with stronger and more efficient compliance and certification frameworks. This will make it much easier for consumers to trust science-backed nutrition brands,” said Shivam Hingorani, Founder, Ace blend.

"The wellness industry is projected to cross USD 370 billion by 2028 in India. This is a clear reflection of India becoming a health-conscious country, making the budget a key opportunity for us to create more meaningful impact on public health. By aligning innovation with clear regulatory standards, everyone wins," he added.

"India has the world’s largest gig workforce and one of the deepest digital public infrastructures anywhere in the world. Together, they have made convenience a permanent part of how our economy works. In that reality, social security cannot continue to be optional. The Economic Survey 2025-26 notes that India’s gig workforce has grown from about 7.7 million in FY21 to nearly 12 million in FY25, underscoring how central this segment has become to the labour market," said Nitin Nahata, CHRO, Gameskraft.

“The Labour Codes are a progressive step, and the inclusion of gig workers is a welcome beginning. But the real test lies in execution. Without timely and effective implementation, intent will not translate into real protection for workers,” Nahata further said.

“The gig economy is no longer experimental. It is now a structural part of India’s growth story. This Budget must therefore treat gig worker protection as economic infrastructure, not welfare. If we are serious about building a truly inclusive and equitable Viksit Bharat, the framework needs to be finalised and rolled out within the next three months, so protection reaches people on the ground, not just the statute book. With gig and platform workers projected to form over 6.7 percent of the non-agricultural workforce by 2030, this is no longer a niche policy issue but a core economic priority,” he added.

People looking to catch live video coverage of the Union Budget 2026 can stay tuned to Mint on our official website, LiveMint, or on our YouTube channel.

The state-run Doordarshan (DD) television channels will also run live feed from Parliament's Budget Session on 1 February.

“The expectation is a sharper pivot towards reviving consumption and boosting disposable incomes, particularly in rural and semi-urban India, which contributes nearly 60% of FMCG demand. Targeted measures to support employment generation ansd skill development are critical, given that the FMCG ecosystem supports over 3 million frontline jobs,” said Anjana Ghosh, MD, Scale Sherpas.

Srinivas Rao Ravuri, Chief Investment Officer, Bajaj Life Insurance, believes that reviving demand requires a balanced approach to public capital expenditure and consumption.

“A balanced approach that supports both public capex and consumption will be key to reviving demand and crowding in private investment. In our view, adherence to fiscal deficit targets should not come at the cost of growth at this juncture. Temporary and calibrated flexibility on the fiscal front, if directed towards productive expenditure, would be a prudent and growth-positive choice,” he said.

Gurvinder Gandhi, CFO at Mitsubishi Electric India, suggests that the Budget can accelerate India’s manufacturing journey by enabling the domestic manufacturing of advanced factory automation tools, including PLCs, industrial robots, cobots, and servo systems.

Expectations include:

Incentives in these segments can assist the Indian industry to go beyond fragmented automation to factory ecosystems that are consistent with global standards.

Reinforcement of high value engineering and innovation through incentive policy assistance to enhance involvement in global value chains and establish long-term technical capabilities.

Focus on technologies that address air quality and energy efficiency across industries through incentives.

Kunal Vasudeva, Managing Director and Co-founder of Indian School of Hospitality, requested the Indian government to put education at the highest decision-making table in the Union Budget 2026-27.

“Budget 2026 must place education in the everyday vocabulary of the country and give it a seat at the highest decision-making table. This requires absolute priority over the next two decades, starting with a fundamental reset of primary education, particularly in rural India where outcomes remain uneven,” said Vasudeva.

Presented ahead of the Budget, the Economic Survey document sets the tone for India's economic approach and provides a snapshot of the government’s assessment of the economy. The document this year was tabled by Sitharaman before both houses of Parliament on 29 January (Thursday).

“As India moves towards becoming a global manufacturing hub, the upcoming Union Budget 2026 presents a vital opportunity to further strengthen the furniture and manufacturing sectors. However, key challenges such as rising raw material costs and logistics expenses continue to impact competitiveness. We believe addressing these concerns through rationalised duties, stable input costs, and incentives for value-added manufacturing will be critical," said Andre Eckholt, Managing Director, Hettich India, SAARC, Middle East & Africa.

“As we head towards the Union Budget, there needs to be a move from just creating infrastructure to making it more efficient and sustainable. Agriculture, construction and water industries are all involved with the use of pumping (and motor) systems, however effi­ciency is under served. Smart incentives for energy efficient pumping solutions, modernization of age old infrastructure and amplification of support for MSME lead indigenous manufacturing has the potential to effectively bring down operational cost, conserve depleting water resources,” said Somen Bajpai, Director & CEO, Aay Bee Engineers.

“For the Indian real estate sector, and particularly for luxury and design-led development, the Union Budget 2026 presents a timely opportunity to introduce policy depth and tax clarity that align with the market’s maturity and long-term investment horizon. Stakeholders today are looking beyond one-off incentives. What the sector truly needs is structural clarity on capital gains and taxation that recognises luxury properties as long-duration, patient capital assets rather than short-term speculative instruments,” said Pavan Kumar, founder and CEO, White Lotus Group.

“The PLI scheme proposal for agrochemicals needs simplification with realistic parameters to attract greenfield plants serving both domestic demand and exports. India’s technical competence warrants initial five-year government support, as developing nations require policy scaffolding to achieve global parity,” according to Rajesh Aggarwal, Managing Director, Insecticides (India) Limited and Vice-Chairman, Crop Care Federation of India.

"While fertilizer subsidies underscores commitment to farmers, parallel investment in next-generation agri-inputs will enhance input efficiency, shield indigenous innovation," Aggarwal added.

“Budget 2026 must prioritise outcome-driven skilling initiatives that build both capability and scale across the renewable energy value chain. The need is to enforce and motivate the establishment of well-regulated ‘Centres of Excellences’ to create a new generation of highly trained ‘RE Commandos’ equipped to operate in real-world grid and on-ground conditions. This will exceptionally enable conversion of 500 GW paper-model into reality wherein every home in India gets lit with ‘Clean and Affordable Energy,'” said Praveen Kakulte, CEO of POWERCON Group.

“ As the Union Budget 2026–27 approaches, healthcare providers are hoping to see practical measures that strengthen capacity without adding to operational strain. The year can become the inflection point where India’s healthcare promise turns into a measurable impact. The conversations are more about whether digital care works or how many seconds it takes to beam an ICU-grade decision into a village clinic without losing a heartbeat," said Avinash Ojha, Managing Director, RG Hospitals.

“As India’s medical aesthetics and advanced skincare segment continues to gain momentum, the Union Budget offers an important opportunity to support its integration into the broader healthcare ecosystem,” said Amit Shukla, General Manager, Head of Indian Operations, Alma Medical Private Limited

“To sustain this growth, rationalisation of GST on medical aesthetic devices and consumables would be a meaningful step, as these technologies play a critical role in delivering safe, regulated, and effective treatments. Greater emphasis on healthcare infrastructure, clinical training, and skill development can further strengthen the quality and consistency of care across the country,” Shukla added.

“As we approach the Union Budget, the real estate sector continues to stand at a critical inflection point. The coming Budget has the potential to catalyse sustainable growth, address challenges to affordability, and rebuild confidence among homebuyers and developers alike. In recent years, rising construction costs and changing market dynamics have compressed supply in the affordable and mid‑income segments, even as demand remains resilient,” said Jason Samuel, Managing Director, House of Swamiraj.

The Budget 2026 speech will be presented on 1 February 2026, Sunday. Finance Minister Nirmala Sitharaman is set to present the Union Budget on this day.

Akshit Bansal, Founder & CEO, Statiq said, “We urge the government to reconsider the current GST rate of 18% on EV charging services and reduce it to 5%. Lowering this tax would not only make EV charging more affordable but also stimulate demand for electric vehicles, aligning with our goals for a cleaner and more sustainable future.”

"India spends less than 2% of GDP on healthcare, yet we're now the diabetes capital of the world. This budget must shift the equation from treating complications to preventing them. I'd like to see tax incentives for preventive health screenings, subsidised continuous glucose monitors for diabetic individuals, and dedicated funding for lifestyle medicine training in medical colleges. We should also focus on enhancing nutritional awareness both at the public & healthcare professional level," said Dr Gagandeep Singh, MBBS, founder of Redial Clinic.

“As India places increasing focus on preventive healthcare and long-term wellness, the upcoming Union Budget has the potential to significantly strengthen the healthcare landscape beyond curative treatment alone. Higher investment in primary care, early screening, and affordable specialised procedures can help reduce disease burden and improve patient outcomes across the country," said Dr Abhishek Pilani, founder, Assure Clinic, MD Dermatology & Hair Transplant and Restoration Specialist.

Yuvraj Shidhaye, Founder and Director, TreadBinary, said, “The Indian startup ecosystem has shown strong resilience and maturity over the past few years, supported by proactive government policies. In the upcoming budget, a key expectation is to further strengthen this momentum by making inward foreign direct investment more accessible while maintaining necessary safeguards. Simplifying compliance, filing, and auditing processes, especially for early-stage startups, would significantly improve ease of doing business."

According to Nitin Nahata, CHRO, Gameskraft, "The gig economy is no longer experimental. It is now a structural part of India’s growth story. This Budget must therefore treat gig worker protection as economic infrastructure, not welfare. If we are serious about building a truly inclusive and equitable Viksit Bharat, the framework needs to be finalised and rolled out within the next three months, so protection reaches people on the ground, not just the statute book."

“Sustainability in budgeting must balance long-term environmental and social goals with financial realities. Union Budget 2026 presents a fundamental opportunity to accelerate India’s green transition through targeted incentives for high-temperature industrial thermal protection," said Ish Mohan Garg, Senior Vice President, Calderys APAC Region.

Umang Bansal, Chairman, Polo Elevators, said, “We hope to see policy continuity, rationalisation of incentive frameworks, faster execution of infrastructure projects, and a stable, predictable tax environment that reduces operational friction for manufacturers."

“With the Union Budget 2026, there is an opportunity to rationalise India’s digital asset framework through targeted, pragmatic refinements. The current 1% TDS and 30% flat tax, without loss set-off provisions, have constrained liquidity and pushed activity offshore. Reducing TDS to a workable range, allowing loss set-off within VDAs, and clarifying cost basis treatment, including transaction costs, would help keep activity onshore while maintaining compliance,” said Aishwary Gupta, Global Head of Payments and RWAs at Polygon Labs.

28 January: This year's Budget Session started with a joint address by President Droupadi Murmu to both the Houses of Parliament.

29 January: Finance Minister Nirmala Sitharaman tabled the Economic Survey 2026.

1 February: FM Sitharaman is scheduled to present the Budget 2026 at 11 AM at the Lok Sabha.

13 February: The first half of the Budget Session ends.

9 March: The second half of the Budget Session will commence on this day.

2 April: The final day of the Budget Session.

“What stands out in this Budget is the recognition that manufacturing competitiveness is built over years, not quarters. Incentives alone are insufficient unless they are backed by infrastructure, financing access, and regulatory continuity. India’s next phase of industrial growth will depend on how effectively it develops deep manufacturing capabilities rather than remaining dependent on imported intermediates," said Yash Gupta, Managing Director, Rikayaa Greentech Private Limited.

“The entertainment sector is evolving rapidly, driven by the digital revolution. The upcoming budget is a prime opportunity to double down on this momentum. Building on initiatives like the 'Create in India' challenge and the National Centre of Excellence for AVGC, we hope to see further policy support for original IP and regional storytelling. Continued investment in hard infrastructure and co-production incentives will be vital for Indian content to not just scale sustainably, but to truly go global,” said Prateek Sharma, Founder, MD and CEO of Studio LSD Ltd.

Kartik Narayan, CEO- Jobs Marketplace, Apna.co said, "The 2026 budget has the opportunity to turn technology, especially AI, into a force multiplier to coach every young Indian, regardless of where they come from. By embedding intelligent enablers into our skilling missions, the government can ensure that high-quality career guidance is no longer a luxury, but a tool available at everyone's fingertips."

“As India rapidly moves towards deeper digital inclusion, the upcoming Union Budget 2026 presents an excellent opportunity to accelerate the growth of the electronics industry through targeted interventions. Sustained and forward-looking policy support for semiconductors and high-end electronic components is critical to reducing India’s import dependence, strengthening the domestic ecosystem, and enhancing our global competitiveness,” said Arijeet Talapatra, CEO, itel India.

“As the Union Budget 2026 approaches, the gems and jewellery industry seeks targeted policy support for a sector that is a major employment generator and export contributor. Rationalising import duties and GST on gold, silver and jewellery is critical to improving cost competitiveness and sustaining demand, especially in a low-margin industry facing rising input costs. A stable, predictable tax framework would boost consumption, enhance export pricing and curb informal trade,” said Parag Shah, CEO, Kisna Diamond & Gold Jewellery.

“Infrastructure continues to be the backbone of India’s long-term development and the vision of Viksit Bharat. As the Union Budget 2026 approaches, the industry expects sustained and well-targeted allocations for expressways and highways, bridges and structures, railways, tunnels, traffic and road safety, urban development, and water resources, along with a sharper focus on project readiness and time-bound execution," said Sanjay Kumar Sinha, Founder and Managing Director, Chaitanya Projects Consultancy.

In 1950, the Budget was leaked during printing. After that, the printing process was shifted from Rashtrapati Bhawan to Minto Road. In 1980, it was shifted to the North Block basement.

Until 1955, the Budget document was exclusively in English, but after 1955-56, it began to be presented in both English and Hindi.

The first budget was presented by RK Shanmukham Chetty in 1947, after independence. The key challenge was to battle the economic headwinds.

During the Halwa ceremony, halwa, an Indian dessert, is prepared and served to officials and staff members of the finance ministry who are involved in preparing the Budget.

FM Nirmala Sitharaman holds the title for the longest budget speech in 2020, at 2.42 hours.

“For the express logistics sector, sustained investments in airport infrastructure, cargo handling capacity, and regional air connectivity will be critical to improving turnaround times and supporting high-value, time-sensitive shipments. In parallel, wider adoption of digital enablers such as unified logistics platforms, data-driven visibility, and paperless processes can further enhance predictability, transparency, and ease of doing business for exporters and MSMEs alike," said Balfour Manuel, Managing Director at Blue Dart.

“Instead of aggressive public spending, this year's budget will likely rely on a recovery in consumption and private investment to drive growth, while keeping overall capex growth moderate. Defence, green energy, urban infrastructure, and manufacturing will see clear preference, while health, education, and traditional infrastructure get only incremental increases. Overall, Budget 2026 will emphasise disciplined spending, targeted capital allocation, and private-sector crowding,” said Gaurav Garg, Research Analyst at Lemonn Markets Desk.