Budget 2026 sectoral expectations: Manufacturers anticipate policy and exports support, GST reforms, funding, incentives

Budget 2026 sectoral expectations: With Finance Minister Nirmala Sitharaman scheduled set to announce Budget 2026 tomorrow, India's manufacturing sector has listed its expectations from the Centre.

Top on the list of demands are GST rationalisation, input cost recalibration, funding lines, policy and incentive measures, continued focus on infrastructure, skill development, and ease of doing business.

“A supportive budget can accelerate local manufacturing and strengthen India’s position as a reliable production hub for domestic and export markets. The Make in India initiative and sustained policy support can help domestic manufacturers scale up, innovate, and compete globally,” noted Andre Eckholt, MD at Hettich India, SAARC, Middle East & Africa.

What hints did Economic Survey 2026 provide?

Tabled in Parliament ahead of the Budget speech, the Economic Survey 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).

Economic Survey 2026 projected FY26 growth at 7.4% as per the first advance estimates released earlier this month. While stating that the Indian economy is expected to expand at 6.8-7.2% in FY27, supported by strong macro fundamentals and a series of regulatory reforms, as per the Economic Survey 2025-26.

It also projected real GDP growth in FY27 in the range of 6.8 to 7.2%. “The outlook, therefore, is one of steady growth amid global uncertainty, requiring caution, but not pessimism,” it stated.

On manufacturing in particular, the document called for policies that raise India’s domestic savings and make the sector more competitive, lower cost of capital, and reduce overreliance on foreign funding.

It said that policies that support firm-level scale and deregulation, improve logistics, infrastructure and trade facilitation, deepen technological capabilities and R&D, and enable sustained participation in global value chains can strengthen productivity and margins in manufacturing.

Thus, policy is likely to look at expanding exports by 2035 by boosting manufacturing through structural changes rather than with hefty spending.

What did the manufacturing sector get in Budget 2025?

• In Budget 2025, Sitharaman announced the ‘National Manufacturing Mission’ (NMM) covering small, medium and large industries. Aimed at furthering “Make in India” goals, it provides policy support, execution roadmaps, governance and monitoring framework for central ministries and states.
• The NMM has five focus areas — ease and cost of doing business; future ready workforce for in-demand jobs; a vibrant and dynamic MSME sector; availability of technology; and quality products.
• She added that it will also support Clean Tech manufacturing, aiming to improve domestic value addition and build ecosystem for solar photovoltaic (PV) cells, electric vehicle (EV) batteries, motors and controllers, electrolyzers, wind turbines, very high voltage transmission equipment, and grid scale batteries.
• She further said the Centre would undertake specific policy and facilitation measures to promote employment and entrepreneurship opportunities in labour-intensive sectors.
• She also announced a focus product scheme aimed at enhancing productivity, quality and competitiveness of India’s footwear and leather sector.

• This she said would support design capacity, component manufacturing, and machinery required for production of non-leather quality footwear, besides the support for leather footwear and products.
• The scheme is expected to facilitate employment for 22 lakh persons, generate turnover of Rs. 4 lakh crore and exports of over ₹1.1 lakh crore.
• A National Action Plan (NAP) for Toys was proposed, focused on development of clusters, skills, and a manufacturing ecosystem to create high-quality, unique, innovative, and sustainable toys under the “Made in India” brand.
• Sitharaman also reiterated Centre’s commitment to ‘Purvodaya’ and proposed to establish a National Institute of Food Technology, Entrepreneurship and Management in Bihar.
• The institute will provide push for food processing activities in the eastern region and enhance income for the farmers through value addition to their produce; and skilling, entrepreneurship and employment opportunities for the youth, she said.

Budget 2025 revised FY25 fiscal deficit to 4.8%, with fiscal deficit target for FY26 at 4.4%. For FY25, the revised estimate for total receipts (excluding borrowings) stood at ₹31.47 lakh crore, with net tax receipts at ₹25.57 lakh crore. The revised estimate for total expenditure was ₹47.16 lakh crore, including ₹10.1 lakh crore of capex.

Manufacturing sector expectations from Budget 2026

Incentives for domestic manufacturers, support for reduced import dependence, cost cutting and ease of doing business; besides expectations for lower duties, GST rationalisation and funds allocation are among the top demands.

• Nitin Jain, Joint MD of Concord Control Systems noted that the Indian rail and mobility ecosystem stands at a critical inflection point where scale, safety, and sustainability must advance together. He expects, continued and enhanced capital allocation towards railway modernisation, indigenous technology development, and next-generation propulsion systems; besides focused support for safety-critical systems, automation, and digitalisation. He added that targeted incentives for domestic manufacturing of high-value electronics, embedded systems, and clean mobility solutions will accelerate innovation and reduce import dependence.
• Hareesh Chandrasekar, CEO and Co-Founder of AGNIT Semiconductors believes Budget can catalyse the next phase of fab and manufacturing growth. He noted that the Centre to become first customer by mandating a share of public procurement from startups with over 50% indigenous content, creating early demand for deep-tech innovation; rationalise GST for semiconductors designed and manufactured in India, and ease upfront GST on critical inputs for deep-tech startups, to ease cash-flow pressures and support India's semiconductor ecosystem.
• Eckholt feels that as India moves towards becoming a global manufacturing hub, key challenges such as rising raw material costs and logistics expenses continue to impact competitiveness. He suggested rationalised duties, stable input costs, and incentives for value-added manufacturing as “critical” areas to address.

• Ravalnath Shende, CMD of Shree Refrigerations (SRL), feels that this Budget is an opportunity to strengthen the manufacturing ecosystem that underpins defence, infrastructure and core industrial sectors. “A balanced approach that combines fiscal discipline with steady investment in defence-linked manufacturing will not only reduce import dependence but also strengthen India’s position in critical supply chains and enhance the competitiveness of domestic manufacturers in the defence sector,” he noted.
• Deepak Pahwa, Chairman of Pahwa Group and MD of Bry-Air, added that policies should focus on industrial economy hinging on green and resilient infrastructure. He expects the Budget to table fiscal incentives for promoting green industry, investments in climate-robust infrastructure to reduce emissions in production cycles, prioritise operational efficiency, resource use and instate climate leadership.
• Vinit Bediya, CMD of Silver Consumer Electricals stressed the importance of continued support for domestic manufacturing of solar PV modules, power electronics, motors, pumps and lighting solutions. He expects: Policy stability through consistent PLI frameworks, rationalisation of customs duties on critical raw materials, and incentives for backward integration, including components and upstream technologies.

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