Union Budget 2026: What India Inc wants from the next reform push

INDIA: As India gears up for the Union Budget 2026–27, scheduled to be presented on February 1, expectations are running high across industries amid strong macroeconomic momentum. The economy is projected to grow between 7 and 7.5 per cent, supported by resilient consumer demand, sustained infrastructure spending, and policy-led reforms. 

Corporate activity remains buoyant, with mergers and acquisitions touching 61.3 billion dollars in the first half of FY25, while foreign investment inflows continue to strengthen. However, persistent challenges such as rising input costs, regulatory complexity, and over 5.4 lakh pending tax appeals underline the need for clarity, simplification, and faster dispute resolution. Against this backdrop, industry leaders are looking to Budget 2026 to deliver targeted reforms that boost manufacturing, formalisation, digital innovation, and inclusive growth.

Manufacturing and Infrastructure in Focus

For the furniture and manufacturing sector, cost pressures and competitiveness remain key concerns. Hettich India, Saarc, Middle East & Africa managing director Andre Eckholt said the upcoming budget presents a crucial opportunity to strengthen India’s furniture and manufacturing ecosystem.

“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,” Eckholt noted. He also called for continued emphasis on infrastructure development, skill building, and ease of doing business to accelerate local production under the Make in India initiative.

Echoing the push for manufacturing-led growth, Stone Sapphire India MD & CEO Shobhit Singh, highlighted the need for policies that combine scale with innovation.

“The next phase of growth must focus on enabling innovation and full technology adoption, especially for MSMEs, on par with advanced global economies. For consumer categories such as toys, stationery, homeware and sports goods, targeted incentives for domestic manufacturing must be complemented by support for automation, digital infrastructure, R&D, and IP-led product development to create globally competitive Indian brands.   A forward-looking budget that integrates manufacturing, technology, skills and exports will not only reduce import dependence but also position India as a trusted global sourcing and brand creation hub,” Singh said.

Financial Inclusion and Credit Flow

From the financial services sector, Muthoot FinCorp outlined a series of recommendations aimed at improving credit access in rural and semi-urban India. CEO Shaji Varghese urged the government to liberalise branch-opening norms for gold loan NBFCs and rationalise capital risk weights to reduce the cost of lending.

“Harmonising Sarfaesi Act applicability for NBFCs in line with banks and Housing Finance Companies (HFCs) to help drive rural housing credit and strengthen recovery mechanisms for smaller-ticket mortgage loans,” Varghese said, adding that targeted schemes should help bring temporarily defaulted borrowers back into the formal lending ecosystem while encouraging formalisation of gold lending.

Commodities, FMCG and retail seek policy balance

In the bullion sector, RiddiSiddhi Bullions Ltd managing director and India Bullion and Jewellers Association president and chairman Prithviraj Kothari, flagged the need for fair duty structures.

“The Indian bullion industry has highlighted three key policy demands to ensure fairness, competitiveness, and long-term sustainability. First, under the Tariff Rate Quota (TRQ) framework and FTAs such as the CEPA with the UAE, the 1 per cent customs duty benefit should be passed on equitably,” Kothari noted. “While Dubai imports around 180 tonnes of gold annually with a 1 per cent duty advantage, gold dore bars imported into India receive only a 0.65 per cent benefit, risking a sharp decline in dore imports. To correct this imbalance, we have proposed raising the duty on dore bar imports to 1.65 per cent.” 

Within FMCG, DS Group emphasised a consumption-driven framework in Budget 2026, urging higher capital expenditure, corporate tax rationalisation, and targeted manufacturing incentives.

The group called for export-focused support alongside rural production initiatives such as capital subsidies, concessional land rates, GST relief on capital investments, and income tax benefits for new rural manufacturing units to drive decentralised and sustainable growth.

Joy Personal Care’s co-founder and chairman Sunil Agarwal also expressed optimism around policies that can sustain consumption recovery.

“A more balanced and consistent GST structure for personal care products, will play an important role in improving profitability while allowing companies to continue offering high-quality products at affordable prices. At the same time, e-commerce and modern trade have a strong opportunity to grow further, supported by increasing digital adoption and more efficient, integrated supply chains,” Agarwal said.

Meanwhile, HyFun Foods’ MD and Group CEO Haresh Karamchandani highlighted the need to strengthen India’s food processing ecosystem through outcome-linked policy support.

“PLI schemes, export incentives, cold chain investments, and backward integration can strengthen supply chains and unlock the full potential of value-added food sectors like frozen foods,” he said, positioning India as a dependable global supplier.

Gaming and Esports call for execution-focused support

India’s fast-growing gaming and esports ecosystem is looking for regulatory clarity, fiscal backing, and differentiated taxation. Nodwin Gaming co-founder and MD Akshat Rathee, said the sector has moved into the mainstream and now needs practical enablers.

“Fair taxation for esports on par with traditional sports, easier access to banking services, and targeted funding under the AVGC framework can help scale Indian game development and original IP creation,” Rathee said.

S8UL Esports co-founder and CEO Animesh Agarwal added that with the Promotion and Regulation of Online Gaming Act in place, the focus must now shift to capacity building.

“Investments in training infrastructure, grassroots competitions, incubation programmes, and creator-focused upskilling can strengthen India’s global position in esports and gaming,” he said.

LVL Zero Incubator’s head of incubation Sagar Nair, stressed the importance of moving from consumption to creation.

“Clear regulatory frameworks, budgetary commitment to the AVGC-XR mission, and incentives for local game development can unlock long-term capital and accelerate India’s emergence as a global development hub,” he noted.

CyberPowerPC India COO Vishal Parekh also pointed to the momentum created by recent regulatory moves, calling for esports prize money taxation in line with traditional sports and stronger grassroots participation through schools and state-level initiatives.

Digital Media and Creator Economy Seek Tech-Driven Reforms

From the digital media sector, Oneindia CEO Ravanan N, said the industry is looking for decisive support rather than broad policy statements.

“Content today runs on AI, automation, and data-driven distribution, yet incentives for tech-led publishing remain limited. A focused push on AI infrastructure, newsroom tools, and regional digital talent skilling will strengthen India’s information ecosystem,” he said.

In the creator economy, Hoopr CEO and co-founder Gaurav Dagaonkar highlighted the urgent need for modernised music licensing and copyright frameworks.

“Transparent, technology-led licensing systems, along with clear norms around AI-generated music and digital ownership, are essential to ensure fair creator compensation while enabling compliance for platforms and brands,” Dagaonkar said, also calling for targeted support for startups and MSMEs.

Healthcare Pushes for Preventive Focus

On the healthcare front, Global Cancer Care founder and chief vision officer Nivedita Basu, underlined the importance of increasing public health spending and shifting focus toward prevention and early detection.

“Public health expenditure remains below the National Health Policy target, while late-stage cancer detection continues to impose heavy human and economic costs. Budget 2026 should prioritise screening programmes, subsidised diagnostics, and expanded access to oncology services beyond Tier I cities,” Basu said. She also called for rationalised tax and regulatory structures for diagnostics and medical devices to improve affordability and innovation.

A Budget balancing growth and reform

As the government prepares its fiscal roadmap for 2026–27, expectations are high for a Budget that balances growth stimulus with structural reforms. While consumption-led sectors are pushing for tax relief and demand-boosting measures, capital-intensive industries are looking for sustained infrastructure spending and policy stability.

Across the board, the message from industry is clear: simplify tax laws, resolve disputes faster, support domestic manufacturing and continue investing in infrastructure. If these priorities are addressed, corporate leaders believe India will be well positioned to maintain its growth trajectory and strengthen its standing in the global economy.