Budget

India’s pharmaceutical and medical technology (MedTech) sectors are closely monitoring the Union Budget 2026, anticipating policy measures that could accelerate innovation, enhance domestic manufacturing, and expand global competitiveness. Industry stakeholders expect incentives for research and development, tax breaks for high-value manufacturing, and support for technology adoption in healthcare delivery.

With Budget 2024 on the horizon, analysts expect a significant government push on capital expenditure to sustain economic growth amid cautious private sector sentiment. While domestic businesses remain circumspect due to cost pressures, global uncertainties, and tightening financing conditions, public investment in infrastructure, transport, and urban development is anticipated to act as a growth catalyst. Experts suggest the Budget could combine targeted fiscal measures with incentives for private investment, balancing immediate growth objectives with long-term development goals.

The Union Budget for FY27 places agriculture technology and climate-resilient infrastructure at the center of India’s long-term economic strategy, signaling a shift from short-term relief toward structural transformation. With climate volatility increasingly affecting farm productivity and rural incomes, the government has emphasized digital agriculture, sustainable irrigation, and resilient supply chains. Parallel investments in climate-focused infrastructure aim to future-proof growth while supporting employment and private capital formation.

As preparations for the Union Budget 2026–27 gather pace, policymakers are increasingly focusing on import duty rationalisation as a lever to boost India’s export competitiveness. Industry stakeholders argue that high and uneven duties on raw materials and intermediate goods inflate production costs, eroding the pricing advantage of Indian exporters in global markets. A calibrated restructuring of customs duties could lower input costs, streamline supply chains and enhance value addition.

The Federation of Associations of Cottage and Small Industries of India (FACSI) has called on the government to introduce focused fiscal and policy support for micro and small enterprises in the Union Budget 2026–27. Citing rising input costs, tight credit conditions and uneven demand recovery, the industry body stressed that smaller businesses remain under sustained financial pressure. FACSI’s recommendations span tax relief, easier access to affordable credit and measures to improve cash flows.

At the recent pre-Budget consultations with the Union government, Goa made a strong case for more equitable fiscal treatment, highlighting the structural constraints faced by small, tourism-dependent states. The state government urged New Delhi to revisit existing funding formulas and sectoral allocations that, it argues, fail to adequately reflect Goa’s economic contribution, demographic pressures, and environmental responsibilities.

As preparations for the upcoming Union Budget gather pace, tax experts have advised the government to re-examine the current income tax surcharge framework, citing concerns over equity, investment sentiment, and effective tax rates. Analysts argue that elevated surcharges on high-income earners and corporates often result in marginal tax rates that exceed global benchmarks, potentially discouraging risk-taking and capital formation. While acknowledging the government’s revenue imperatives, experts believe a calibrated rationalisation could broaden the tax base and improve compliance.

Punjab and Telangana have stepped up their demands for increased central funding in the run-up to the FY27 Union Budget, citing rising expenditure pressures and long-term development commitments. Both states have sought higher allocations to support infrastructure creation, social welfare programs, and fiscal stability. The renewed push underscores the growing strain on state finances as borrowing costs rise and revenue growth remains uneven.

The upcoming FY27 budget may include a customs amnesty scheme aimed at resolving long-standing disputes and easing compliance burdens for importers and exporters. The proposed initiative is expected to allow businesses to settle historical duty and penalty liabilities with reduced interest or fines, providing relief to trade participants while streamlining revenue collection. Analysts suggest that such a measure could improve ease of doing business, encourage voluntary compliance, and unclog pending litigation in customs authorities.

The Union Budget 2027 is expected to mark a decisive shift in India’s industrial policy by introducing targeted incentives to accelerate green steel production. As the steel sector accounts for a significant share of the country’s carbon emissions, policymakers are increasingly focused on balancing industrial growth with climate commitments. Proposed measures are likely to include financial incentives for low-emission technologies, support for hydrogen-based steelmaking, and fiscal relief for companies investing in cleaner production processes.