Union Budget 2026-2027: Read Expert Insights on Macroeconomy, Taxation, Trade Policy and more

Union Budget 2026 spans multiple areas, including manufacturing, financial sector reforms, digital infrastructure, healthcare, and education. The following section compiles elicited expert opinions on key announcements and sector-specific measures.

Cyril Amarchand Mangaldas

While the Budget doesn’t attempt a ‘big bang’, it sends an important signal of stability and policy continuity at a time of heightened geopolitical uncertainty—reinforcing that India remains open for business. The real growth dividend will come from disciplined implementation of last year’s measures, alongside the steady cadence of legislative and regulatory reform through the year.

The proposed high-level committee on banking is a timely opportunity to shape the next generation of banking reforms—strengthening governance, risk management and credit intermediation to support India’s investment cycle. Equally, the emphasis on an NBFC vision—including the restructuring roadmap for Power Finance Corporation and REC Limited—can deepen long-term financing for infrastructure and the energy transition.

It’s also encouraging to see a clear focus on technology and strategic capacity, including semiconductors and AI, alongside measures such as tax support for global data centres. Finally, enabling REITs and InvITs for PSUs and the move to strengthen services via a high-level standing committee on education and enterprise can help broaden, and sustain, India’s growth engines.”

— Cyril Shroff, Managing Partner, Cyril Amarchand Mangaldas

Macroeconomy & Policy Continuity

“While the Budget doesn’t attempt a ‘big bang’, it sends an important signal of stability and policy continuity at a time of heightened geopolitical uncertainty—reinforcing that India remains open for business. The real growth dividend will come from disciplined implementation of last year’s measures, alongside the steady cadence of legislative and regulatory reform through the year.”

— Cyril Shroff, Managing Partner, Cyril Amarchand Mangaldas

The inclusivity narrative is present, though it’s on ground impact will depend on regulatory clarity, institutional capacity, and last-mile execution. There is a lot of focus on reform and support including for tech and new economy, tier 2 and 3 markets and skilling.

— Paridhi Adani, Partner (Head — Ahmedabad Office), Cyril Amarchand Mangaldas

This initiative is also aligned with the National Data Centre Policy 2025, reinforcing India’s ambition to emerge as a global leader in data centre capabilities.

— Huzefa Tavawalla, Partner (head – digital disruption), Cyril Amarchand Mangaldas

Banking & Financial Sector

The proposed high-level committee on banking is a timely opportunity to shape the next generation of banking reforms—strengthening governance, risk management and credit intermediation to support India’s investment cycle. Equally, the emphasis on an NBFC vision—including the restructuring roadmap for Power Finance Corporation and REC Limited—can deepen long-term financing for infrastructure and the energy transition.

— Cyril Shroff, Managing Partner, Cyril Amarchand Mangaldas

The Budget’s announcement on Banking for Viksit Bharat is an opportunity for fundamental reforms to have a globally competitive financial sector, including new banking licenses, and amendments to permit a wider range of banking and finance products and services. This builds in the acknowledgement of the strong banking sector — good asset quality, historic low NOAs and profitability, and seeks to build a next generation financial sector to finance India’s growth; while prioritising financial stability, consumer protection and continued financial inclusion 

This is complemented by a vision for non-banking finance companies for enhanced credit growth, augmented by technology. The restructuring of government owned NBFCs PFC and REC could fillip funding for the power sector.

— Richa Roy, Partner, Cyril Amarchand Mangaldas

Announcement to form Banking Review Committee represents a key policy measure to strengthen oversight, governance, and comprehensively review the banking landscape, for India’s next phase of economic expansion.

Proposal to restructure NBFCs signals consolidation of power and infrastructure development finance institutions (DFIs); targets for credit disbursement and technology adoption for NBFCs, and proposed review of Foreign Exchange Management Act (FEMA) to modernise, and align, foreign investment rules with evolving global capital flows, is timely.

— Anu Tiwari, Partner (Head – Fintech and FSRP), Cyril Amarchand Mangaldas

Indirect Taxes, Customs, Trade Policy & SEZ

This customs package is not a routine rate adjustment; it is a structural recalibration of India’s tariff philosophy pruning legacy exemptions, correcting duty inversion, and aligning border taxation with an unapologetically pro-manufacturing industrial policy.

The export-linked relaxations for marine, leather, and textile sectors are fiscally modest but strategically sharp; they lower working capital friction while signalling that India intends to compete on speed, scale, and predictability in global value chains.

On the procedural side, the shift toward AEO-driven trust architecture marks a philosophical pivot in customs administration from suspicion-based enforcement to compliance-based facilitation which is how mature trading nations operate.

The one-time SEZ relief is an acknowledgment of geopolitical reality: when global supply chains fracture, domestic policy must absorb the shock. Allowing calibrated DTA sales is a pressure valve that preserves industrial capacity without diluting the SEZ framework.

Perhaps the most progressive element is the dispute-settlement posture: permitting closure through calibrated payments recognizes that tax administration must distinguish between evasion and disagreement, and that certainty is often more valuable than prolonged litigation.

— SR Patnaik, Partner (head – Taxation), Cyril Amarchand Mangaldas

By migrating effective rates from scattered notifications into the tariff schedule itself, the government is attacking one of trade law’s chronic inefficiencies, interpretational opacity and replacing it with legislative certainty that exporters and importers have demanded for years.

Digitized clearances, Al-enabled scanning, and warehouse operator-centric reforms together represent the quiet revolution in this budget; transaction time, not tariff rate, is increasingly the decisive tax in international trade.

— Kunal Savani, Partner, Cyril Amarchand Mangaldas

Direct Tax & Special Regimes

The tax holiday extending until 2047 for foreign companies providing cloud services to customers globally using India data centres is poised to significantly boost FDI and accelerate large scale infrastructure development.

— Huzefa Tavawalla, Partner (head – digital disruption), Cyril Amarchand Mangaldas

Government of India has now offered a long term & stabilised tax holiday till 2047 for foreign companies providing cloud services through Indian data centres. This is a significant shift in how India wants to position itself in global digital ecosystem. This also incentivises the set-up of local infrastructure along with higher investments in high value digital assets.

— Kunal Savani, Partner, Cyril Amarchand Mangaldas

The proposed tax holiday for global cloud service providers leveraging data centres in India to serve their overseas customers is a positive signal. It is expected to catalyse significant capex not only in data centres, but also in allied infrastructure such as power, cooling and connectivity, further accelerating an already high-growth sector. Given the capital-intensive nature of this industry, we anticipate a sharp uptick in large-ticket financing transactions in the years ahead.

— Pururaj Bhar, Partner, Cyril Amarchand Mangaldas

Extension of tax holiday from 10 to 20 years for IFSC units and clarification of post-tax holiday tax rate @15% will go a long way in providing the much-needed tax certainty and facilitate business planning for existing and proposed IFSC units.

— Ketaki Mehta, Partner – GIFT City, Cyril Amarchand Mangaldas

Tangible long term Tax incentives for establishing global hyperscale digital infrastructure in India are likely to accelerate several key projects in the space, encouraging rapid implementation from MOU to available compute capacity.

— Arun Prabhu, Partner & Co- Head, Digital +, TMT, Cyril Amarchand Mangaldas

Infrastructure

The Finance Minister’s revelation of a ₹12.2 lakh crore infrastructure outlay conveys a resounding endorsement of India’s dynamic growth narrative. This monumental scale of expenditure will intensify economic momentum, galvanise private sector participation, and cultivate world-class infrastructure indispensable for enduring and sustainable development.

The Finance Minister’s spotlight on the indigenous seaplane manufacturing initiative ushers in remarkable prospects for augmenting regional connectivity and advancing tourism. By synergising sophisticated manufacturing processes with innovative transport modalities, this endeavour is set to unlock latent economic opportunities spanning India’s coastal and island territories.

In the present Union Budget, the Finance Minister has articulated an ambitious and progressive blueprint that envisions infrastructure as the linchpin of India’s economic rise. By augmenting capital allocations and pursuing strategic investments in transport, digital connectivity, and urban systems, the Budget not only consolidates the nation’s pathway to growth but also fortifies the pillars of sustainable and inclusive advancement. This robust emphasis on infrastructure amplifies productivity, enhances connectivity, and paves new avenues for private investment, reinforcing resolve to achieve the aspiration of a developed India by 2047.

— Ajay Sawhney, Partner (Head – Northern Region), Cyril Amarchand Mangaldas

Budget continues its emphasis on expanding public investment in infrastructure sector by increasing the Capex allocation and aiming to reduce risks for private sector lenders and investors. Setting up of Infrastructure Risk Guarantee Fund to provide partial credit guarantee to lenders is expected to reduce the effective cost of funding infrastructure projects and thereby encourage more private sector investment and also reduce the relative credit cost disadvantage that private sector participants suffer, as compared to their public sector counterparts.

Specific proposals like seven new high speed rail corridors, 20 new national waterways and separate allocation for carbon capture and storage technologies (CCUS) shows the Government’s continued commitment to expand physical infrastructure, tackle increasing pollution through caron pricing and carbon capture technologies and leverage expansion of infrastructure facilities to accelerate economic growth and expand employment opportunities. These measure tie-in well with the aim to increase monetisation of CPSU real estate through dedicated REITs and proceeds from such monetisation will further contribute to infrastructure spending as well as capex needs of the CPSU concerned.

— Ramanuj Kumar, Partner (Co-Head – Projects (Energy & Energy Transition)), Cyril Amarchand Mangaldas

Energy Climate & Transition

Equally, the emphasis on an NBFC vision—including the restructuring roadmap for Power Finance Corporation and REC Limited—can deepen long-term financing for infrastructure and the energy transition.

— Cyril Shroff, Managing Partner, Cyril Amarchand Mangaldas

These measure tie-in well with the aim to increase monetisation of CPSU real estate through dedicated REITs and proceeds from such monetisation will further contribute to infrastructure spending as well as capex needs of the CPSU concerned.

— Ramanuj Kumar, Partner (Co-Head – Projects (Energy & Energy Transition)), Cyril Amarchand Mangaldas

The energy transition proposals reveal a deliberate customs strategy: remove fiscal bottlenecks on battery storage, solar inputs, and critical minerals so that the green economy is not throttled at the border by outdated tariff architecture.

— SR Patnaik, Partner (head – Taxation), Cyril Amarchand Mangaldas.

Extending duty exemptions for nuclear and advanced energy infrastructure until 2035 is less a tax concession and more a long-term policy covenant, it assures investors that India’s energy security ambitions will not be undermined by short-term fiscal oscillations.

— Kunal Savani, Partner, Cyril Amarchand Mangaldas.

Semiconductors, Electronics & ISM 2.0

The Finance Minister’s unwavering focus on amplifying manufacturing within electronic components and semiconductors via ISM 2.0, backed by an investment of ₹40,000 crore, heralds a transformative leap towards establishing a robust and internationally eminent electronics ecosystem. By fortifying indigenous value chains and championing state-of-the-art manufacturing, ISM 2.0 is poised to elevate India as a reliable epicentre for semiconductor and electronics production.

— Ajay Sawhney, Partner (Head – Northern Region), Cyril Amarchand Mangaldas.

The Increased focus on semiconductor manufacturing (including associated IP), electronics component manufacturing, rare earth and critical minerals corridors portends greater vertical integration in the electronics value chain.

— Arun Prabhu, Partner & Co- Head, Digital +, TMT, Cyril Amarchand Mangaldas.

Budget 2026 has an enhanced focus on the semiconductor industry and manufacturing in India. India Semiconductor Mission 2.0 announced to produce equipment and materials, design full-stack Indian IP, and fortify supply chains will result in a significant increase in seeking IP protection by both domestic and international players related to semiconductor technology in India and related enforcement.

— Swati Sharma, Partner (head – intellectual property), Cyril Amarchand Mangaldas.

AI, Data Centres & Digital Economy

It’s also encouraging to see a clear focus on technology and strategic capacity, including semiconductors and AI, alongside measures such as tax support for global data centres.

— Cyril Shroff, Managing Partner, Cyril Amarchand Mangaldas.

The cross sectoral emphasis on AI as an engine for inclusive growth along with the national AI and quantum missions and research and development funds show a strong focus on AI to enable India’s economic and inclusion goals.

— Arun Prabhu, Partner & Co- Head, Digital +, TMT, Cyril Amarchand Mangaldas.

A balanced definition of Sovereign AI is emerging from this budget. The indigenous push on semiconductors and rare-earth corridors strengthens India’s strategic autonomy at the supply-chain layer. In parallel, the tax-holiday till 2047 for foreign cloud providers running services from Indian data centres signals an openness to global capital in the compute layer—while retaining domestic participation via the Indian reseller requirement. By this yardstick, India’s Sovereign AI mission looks increasingly inclusive, not isolationist.

— Mihir Rale, Partner — (Co-Head — Digital | TMT), Cyril Amarchand Mangaldas.

The proposed tax holiday for global cloud service providers leveraging data centres in India to serve their overseas customers is a positive signal. It is expected to catalyse significant capex not only in data centres, but also in allied infrastructure such as power, cooling and connectivity, further accelerating an already high-growth sector.

— Pururaj Bhar, Partner, Cyril Amarchand Mangaldas.

Education, Skills & University Townships

The proposal to support 5 university townships near industrial hubs and increased budgetary outlay for higher education will spur the already growing interest in private universities and increase the opportunities for foreign university campuses in India.

— Vivek Kathpalia, Partner, Cyril Amarchand Mangaldas.

The emphasis on education infrastructure, particularly the idea of university townships, reflects a long-term view of talent development.

This Budget connects education and healthcare in a way that is structurally important for India, enabling university and research ecosystems alongside pharma and healthcare innovation. Integrated university townships, skilling and R&D support create the talent and research base needed for a stronger life-sciences sector, while regulatory stability and manufacturing depth enable scale. Together, this positions India to move from cost-led growth to knowledge- and innovation-driven global leadership.

— Paridhi Adani, Partner (Head — Ahmedabad Office), Cyril Amarchand Mangaldas.

Budget continues to maintain its impetus on skill development and employability by announcing the set-up of a High- Powered ‘Education to Employment and Enterprise’ Standing Committee. Focused and industry relevant education is aligned with the NEP and will help realise the vision of Viksit and Atmanirbhar Bharat.

— Aarushi Jain, Partner (head media, education & gaming), Cyril Amarchand Mangaldas.

Pharma, Healthcare & Public Health

Building on the Government’s continued emphasis on domestic manufacturing, R&D and healthcare capacity, the ‘Bio Pharma Shakti’ initiative introduced in the Union Budget 2026, is a timely and constructive intervention.

The proposed ₹10,000 crore investment over the next five years, alongside faster clinical trial approvals and the expansion to 1,000 trial sites, has the potential to significantly strengthen India’s bio-pharma and biosimilars ecosystem, particularly in addressing the growing burden of diabetes and cancer. With effective implementation, the initiative can improve access to advanced therapies and further reinforce India’s position as a trusted and reliable global healthcare partner.

The Union Budget 2026 reflects a clear and deliberate focus on strengthening India’s pharma and healthcare ecosystem. Alongside support for innovation-led pharmaceutical growth, the Budget’s recognition of quality-driven Ayurveda research and export potential is a positive step towards integrating traditional systems with modern standards.

The emphasis on training and skill development for healthcare providers, including allied health professionals and caregivers, and the creation of five regional medical hubs integrating research, quality care, and post-treatment services, can meaningfully expand employment opportunities while improving healthcare outcomes.

Additionally, the focus on animal husbandry and veterinary care, supported by collaborative research and incentive frameworks, signals a more holistic and future-ready approach to health and life sciences policy.

Beyond pharmaceuticals and manufacturing-led interventions, the Union Budget 2026 marks an important shift towards strengthening the foundations of healthcare delivery and public health systems. The focus on mental health through the establishment of NIMHANS 2.0, investments in healthcare education and capacity building, and the creation of integrated regional health ecosystems point to a more people-centric approach.

Measures aimed at improving veterinary services, fisheries, and animal health infrastructure also reflect an understanding of the interlinkages between public health, livelihoods, and biosecurity. Taken together, these initiatives indicate a broader vision for healthcare that prioritises resilience, workforce readiness, and long-term societal impact.

— Biplab Lenin, Partner, Cyril Amarchand Mangaldas.

This Budget connects education and healthcare in a way that is structurally important for India, enabling university and research ecosystems alongside pharma and healthcare innovation. Integrated university townships, skilling and R&D support create the talent and research base needed for a stronger life-sciences sector, while regulatory stability and manufacturing depth enable scale. Together, this positions India to move from cost-led growth to knowledge- and innovation-driven global leadership.

— Paridhi Adani, Partner (Head — Ahmedabad Office), Cyril Amarchand Mangaldas.

Manufacturing, Textiles & Aviation

The Finance Minister’s pronouncement regarding Mega Textile Parks vividly showcases a resolute commitment to cultivating scale, operational efficiency, and global prominence in India’s textile landscape through the establishment of premier infrastructure and seamlessly integrated value chains, these parks are set to dramatically propel India’s stature as a leading force in global textile manufacturing.

The Finance Minister’s spotlight on the indigenous seaplane manufacturing initiative ushers in remarkable prospects for augmenting regional connectivity and advancing tourism. By synergising sophisticated manufacturing processes with innovative transport modalities, this endeavour is set to unlock latent economic opportunities spanning India’s coastal and island territories.

— Ajay Sawhney, Partner (Head – Northern Region), Cyril Amarchand Mangaldas.

The aviation and electronics measures reflect a textbook application of tariff engineering insulating domestic value addition while neutralizing duties on essential inputs a balance that strengthens manufacturing without sliding into protectionist excess.

— Kunal Savani, Partner, Cyril Amarchand Mangaldas.

MSME & Access to Finance

Measures to strengthen micro, small and medium enterprises (MSMEs), mandatory use of the Trade Receivables Discounting System (TReDS) for MSME procurement and fresh capital for the Self Reliance India Fund will enhance capital flows.

— Anu Tiwari, Partner (Head – Fintech and FSRP), Cyril Amarchand Mangaldas. 

Foreign Investment, FEMA & IFSC

Equally important for foreign investors is the proposed comprehensive overhaul of the Foreign Exchange Management (Non-debt Instruments) Rules, which signals a move towards reviewing certain sectoral restrictions (including potentially reviewing the restrictions pursuant to the Press Note 3) to align the FDI policy with India’s evolving economic priorities. Together, these measures improve capital mobility, potentially setting the stage for sustained cross-border investment and consolidation across multiple sectors.

— Ravi Shah, Partner, Cyril Amarchand Mangaldas.

… and proposed review of Foreign Exchange Management Act (FEMA) to modernise, and align, foreign investment rules with evolving global capital flows, is timely.

— Anu Tiwari, Partner (Head – Fintech and FSRP), Cyril Amarchand Mangaldas.

Extension of tax holiday from 10 to 20 years for IFSC units and clarification of post-tax holiday tax rate @15% will go a long way in providing the much-needed tax certainty and facilitate business planning for existing and proposed IFSC units.

— Ketaki Mehta, Partner – GIFT City, Cyril Amarchand Mangaldas.

Agriculture, Geospatial & Rural Technology

Recognising the importance of AI in Agri tech, the introduction of Bharat Vistar a dedicated multilingual AI tool for farmers will enhance and improve agricultural practices. This initiative will also provide a significant boost to investments and infrastructure in the geospatial sector, which is a critical data layer for soil health and sustainable farm management.

— Huzefa Tavawalla, Partner (head – digital disruption), Cyril Amarchand Mangaldas.

Orange Economy Boost

Focus on the Orange Economy, with a specific focus on animation, gaming and visual effects will provide a much-needed boost to online gaming sector.

— Arun Prabhu, Partner & Co- Head, Digital +, TMT, Cyril Amarchand Mangaldas.

REITs/InvITs & Public Asset Monetisation

Finally, enabling REITs and InvITs for PSUs and the move to strengthen services via a high-level standing committee on education and enterprise can help broaden, and sustain, India’s growth engines.

— Cyril Shroff, Managing Partner, Cyril Amarchand Mangaldas

These measure tie-in well with the aim to increase monetisation of CPSU real estate through dedicated REITs and proceeds from such monetisation will further contribute to infrastructure spending as well as capex needs of the CPSU concerned.

— Ramanuj Kumar, Partner (Co-Head- Projects (Energy & Energy Transition)), Cyril Amarchand Mangaldas.

Tarun Jain

From the tax disputes paradigm, the Budget proposals for Financial Year 2026-27 carry many changes to obviate long pending disputes affecting a large number of taxpayers. To list a few substantial interjections proposed by the Budget, the following are noteworthy;

1. Significantly increasing the remit and scope of ‘safe harbours’ and fast-tracking conclusion of ‘Advance Pricing Agreements’ is positive steps which affects multinationals having cross-border transactions and, thereby obviating scope of transfer pricing disputes which envisage strenuous record-keeping (towards finding comparables, pricing and profit formula, etc.) and drain precarious resources of both the taxpayers and tax-administration in dispute settlement across various forums.¹

2. A new scheme of tax assessment was introduced earlier — dubbed as ‘faceless’ scheme — to promote transparency in governance. This had created new category of faceless assessing officers (‘FAO’) which would issue notices for reassessment under the income tax law. However, in many cases the existing jurisdictional assessing officers (‘JAO’) issued notices to carry out such proceedings. The correct of the JAO’s notices were challenged before various High Courts which returned contradictory findings and, therefore, the challenge to correctness of their orders has been pending in Supreme Court,² for quite some time. The Finance Bill, 2026 has proposed amendments conferring the entitlement upon JAOs, thereby seeking to bring an end to the impasse.³

3. Similarly, towards promoting transparency in governance, the concept of ‘Document Identity Number’ (DIN) was introduced earlier qua referencing of orders passed by the tax authorities. The Supreme Court had urged progressive adoption of DIN even by the States.⁴ On such premise, various High Courts had annulled orders passed by income tax authorities in view of the missing DIN and the propriety of these orders has been pending consideration of the Supreme Court.⁵ In order to foreclose these disputes, declaratory amendments are proposed by the Finance Bill, 2026 to the effect that DIN related aspects shall not affect the validity of the orders passed by income tax authorities where such orders can be otherwise referenced.⁶ Thus, a number of technical objections to the orders on account of DIN would stand quelled.⁷

4. A very large number of international taxation cases were pending, especially in the Income Tax Appellate Tribunal (‘ITAT’) in view of a decision of the Madras High Court in Roca Bathroom⁸ and a split verdict of a Supreme Court bench in Shelf Drilling⁹ regarding the timelines for passing of Assessment Orders in cases wherein the assessment was determined under the aegis of ‘Dispute Resolution Panel’. The hearing on merits in these cases had come to a standstill, to address which the Finance Bill, 2026 makes provisions to amend both the Income Tax Act, 1961 (to address the pending disputes) and the Income Tax Act, 2025 (to obviate the scope for such disputes in the new law) by introducing clarification with retrospective effect regarding the construction of such timelines.¹⁰ In view of the proposed amendments, it is likely that the hearing in the pending cases will be expedited on their merits by the ITAT.

The Budget, thus, proactively steers evolution of tax policy towards preempting the determination of long pending tax controversies affecting a large number of taxpayers, thereby paving the way towards overall reduction in tax disputes and reducing the burden on courts.