India’s FY27 Budget: Major Takeaways & Sectoral Impact

06 February 2026

The Union Budget 2026-27 focuses on capital-intensive growth, domestic manufacturing, strategic self-reliance, and long-term infrastructure development.

Key Highlights:

• Infrastructure & Capital Expenditure – Record allocations for railways, logistics corridors, power transmission, urban infrastructure, and industrial clusters aim to strengthen connectivity, reduce logistics costs, and crowd in private investment.
• Taxation & Fiscal Measures – Selective customs duty rationalisation, sector-specific duty exemptions, and revisions in securities transaction taxes reflect a calibrated approach to revenue mobilisation while supporting manufacturing and capital markets.
• Manufacturing & Industry Support – Strong policy push for electronics manufacturing, battery storage systems, container manufacturing, heavy engineering, and textiles through incentive schemes, PLI extensions, and cluster-based development.
• Agriculture & Rural Development – Continued support for rural infrastructure, drinking water schemes, irrigation projects, and allied activities focuses on improving rural livelihoods and execution efficiency.
• Technology & Digital Economy – Enhanced allocations for semiconductors, data centres, AI models, and IT services reforms aim to position India as a global compute, electronics, and digital innovation hub.
• Financial Services & Capital Markets – Measures impacting securities transaction taxes, derivatives trading, and exchange operations indicate a focus on market stability, transparency, and long-term capital formation, while supporting financial deepening and investor confidence.
• Pharmaceuticals & Healthcare – Higher budgetary allocation for healthcare, launch of flagship biopharma initiatives, customs duty exemptions on life-saving drugs, and expanded AYUSH funding aim to strengthen healthcare access, innovation, and domestic pharmaceutical capabilities.
• Social Welfare & Human Development – Increased spending on healthcare, education, skill development, and employment programs underscores a sustained focus on human capital and inclusive growth.
• Green Energy & Sustainability – Policy support for solar energy, battery storage, grid modernisation, rare earth processing, and electric mobility strengthens India’s clean energy transition and supply-chain security.
• Defence & Strategic Sectors – Higher defence capital outlay, increased spending on aerospace engines, indigenous weapons, and critical minerals reinforces national security and self-reliance objectives.

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