Budget 2026 expectations Updates: Markets, tax reforms, and investor expectations ahead of Feb 1

Sidhant Kalra, Director at Khan Chacha: The food and hospitality sector offers a clear view of how rapidly consumer lifestyles are evolving. Over the years, MSME-focused reforms, along with improvements in digital payments, online ordering platforms, and urban infrastructure under initiatives such as Digital India, have enabled food businesses to extend their reach beyond traditional dine-in formats and respond to changing consumption patterns.

Dining habits have shifted noticeably. Lunch has become increasingly functional, shaped by work routines and time constraints, while late-night consumption now accounting for a growing share of online food orders is driven by longer days, flexible schedules, and convenience-led choices. Hyperlocal delivery and digital ordering have blurred traditional mealtime boundaries, allowing food to integrate more seamlessly into everyday life.

As these patterns continue to evolve, the sector’s focus is moving toward consistency, operational efficiency, and experience. Strengthening supply chains, last-mile logistics, and urban delivery infrastructure building on existing city-level transport and connectivity investments can help food and hospitality businesses adapt to changing demand while maintaining quality. The future of dining will depend on how well the ecosystem keeps pace with when, why, and how consumers choose to eat.

Sandeep Singh, Managing Director at Brawn Globus: The real estate and construction sector is increasingly evaluating policy through the lens of long-term value creation rather than short-term momentum. As the industry looks ahead to Budget 2026, there is a growing expectation that budgetary priorities will support sustainable construction practices, better planning frameworks, and the wider adoption of technology across the project lifecycle.

The sector is gradually moving toward more data-driven design, execution efficiency, and responsible use of resources. Policy reforms that encourage innovation, skilling, and modern construction methodologies can strengthen on-ground outcomes. Equally important is preparing the workforce to adapt to these changes. As urban needs evolve, the future of construction will depend on how well infrastructure development aligns with efficiency, sustainability, and the realities of modern living.

Prince Khanna, CEO at Eleve Media and CreatorTag: India’s creator economy has increasingly begun to mirror the structure of a startup-driven economy. Over the past few years, initiatives such as Startup India, Digital India, and the Fund of Funds for Startups (FFS) have helped create an enabling environment for digital-first businesses, including content-led enterprises, to formalize operations and scale sustainably.

In parallel, policy support for MSMEs and the expansion of public digital infrastructure, ranging from affordable internet access to UPI-led monetization has lowered entry barriers for creators and small content businesses. These frameworks have allowed many creators to move beyond informal gig models toward more structured, entrepreneurial setups.

At the same time, as creators build visibility and scale, concerns around online safety and cyberbullying are becoming more prominent, especially for independent and regional voices. Existing regulations such as the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules 2021, and the Digital Personal Data Protection Act, offer an important starting point. Strengthening awareness and enforcement around these safeguards will be essential to ensure creators can grow in a safer, more sustainable digital ecosystem.

Anil Sachdev, Founder of SOIL Institute of Management: India has a clear opportunity to strengthen how higher education prepares students for a changing world of work. While NEP 2020 rightly emphasised multidisciplinary learning, skills, and industry exposure, outcomes remain uneven, with only about 50-55% of graduates considered employable.

As AI reshapes jobs, employability increasingly depends on human capabilities -- critical thinking, ethics, responsibility, and adaptability -- alongside technical skills. Yet fewer than half of institutions offer structured, industry-aligned experiential learning. Building on NEP’s vision, deeper industry-academia collaboration through live projects, co-created curricula, and faculty upskilling is essential to move from intent to impact.

Prof. Nien Siao, Dean at JS Institute of Design: Going forward in 2026, while the industry strongly promotes AI for design creation and innovation, it is crucial to understand its implications for creative processes. As technology increasingly drives creative generation, policies -- especially budgetary ones -- must address potential repercussions.

There is a strong need to empower students through experiential learning, research and development facilities, technical innovation, materials, and prototyping support. Budgetary provisions for setting up Makers’ Labs nationwide can help creators understand manufacturing processes end-to-end, enabling meaningful innovation without stifling discovery.

Sarvash Kalra, Director at Dayal Opticals: India’s eyewear market has seen steady growth over the past few years, driven by rising screen usage, greater awareness around eye health, and increasing preference for organized retail. Industry estimates place the Indian eyewear market at over 10 billion USD, with organized players now accounting for 35-40% of the segment, reflecting a gradual shift toward standardized products and professional eye testing.

This growth has been supported by improvements in urban infrastructure, digital payments, and retail connectivity, which have helped eyewear brands expand their footprint beyond traditional high-street formats. Better logistics, faster last-mile delivery, and tech-enabled retail have also improved consumer access, particularly in Tier-2 and Tier-3 markets.

As demand continues to rise, strengthening retail infrastructure and ensuring smoother supply chains will be key to sustaining growth. A policy environment that supports organized retail and digital enablement can help eyewear businesses respond more effectively to evolving consumer needs and lifestyle-led demand.

Swoyan Satyendu, CEO of Newron: As India looks ahead, the conversation around technology in education must move beyond metros and elite institutions. For students in rural and Tier-2 cities, access to technology is not about replacing classrooms, but about strengthening them. Digital tools, when designed thoughtfully, can help bridge gaps in teaching quality, exposure, and learning resources. Technology can support teachers, personalize learning for students, and bring consistency where infrastructure or faculty availability is uneven .

However, the focus must remain on relevance and accessibility. Introducing tech into schools should be accompanied by teacher training, local context, and affordable infrastructure. Without this, digital adoption risks deepening existing divides. The real opportunity lies in using technology as an equalizer-one that enables students, regardless of geography, to build foundational skills, curiosity, and confidence. Policy support that prioritizes inclusive digital education can play a critical role in shaping more balanced learning outcomes across regions.

Ankush Tiwari, CEO & Co-Founder, pi-labs: Amid rising geopolitical and security challenges, the defence and internal security ecosystem is looking for a more execution-focused fiscal push in this Budget. From this Budget, the industry expects multi-year capital allocations that enable not just development, but scaled deployment of indigenous AI-led intelligence systems, cyber defence platforms, robotics, quantum-safe communications, and secure software stacks across defence and law enforcement. These technologies are now core operational infrastructure and need to be funded and procured with the same seriousness as physical defence assets, not treated as discretionary IT spends.

From an industry standpoint, there is also a strong need for incentive structures similar to a Product Linked Incentive model for sovereign security technologies—one that supports indigenous design, IP ownership, deployment readiness, and long-term lifecycle support. This would help Indian companies move beyond pilots, invest confidently in R&D, reduce dependence on imported systems, and build sustainable, mission-critical capabilities that can support India’s security requirements over the long term.

Harsh Vardhan Bhagchandka, President, IPL Biologicals: IPL Biological support the government’s decision to reduce GST on biopesticides to 5 percent, which is a positive step toward encouraging sustainable agricultural practices. Ahead of Budget 2026, we urge focused incentives for balanced nutrient application through biological products, which can help reduce India’s dependence on chemical fertiliser imports and ease the long-term subsidy burden. We also strongly recommend including the biological fertiliser industry under the Production Linked Incentive (PLI) scheme to support domestic manufacturing, innovation, and scalable adoption of sustainable agri-solutions.

Bhavik Bhandari, Chief Business Officer, Ashwin Sheth Group: As India’s real estate market continues its momentum with residential sales touching over 3.48 lakh units in 2025 and housing affordability at three-decade best levels, the 2026 Union Budget must fuel inclusive growth. We expect revised affordable housing definitions, rationalised GST and enhanced tax incentives to unlock stalled supply and support first-time homebuyers. Policy clarity on industry status and easier access to capital will sustain investment momentum, having already seen nearly ₹18,000 crore raised via capital markets in FY26 YTD. A forward-looking budget will strengthen demand, boost supply and reinforce real estate’s role in economic growth and continued support in Premium and Luxury space as well.

Industry leaders argue that the next phase of India’s AI journey hinges on compute, capital and capability. “Building India’s AI capacity will depend on new investments and incentives,” says Jaspreet Bindra, co-founder of AI&Beyond. He points to the urgent need to scale data centres and cloud infrastructure to meet surging demand from AI-led applications. Bindra bats for a second phase of the IndiaAI Mission with a higher outlay, expanded grants for infrastructure, new centres of excellence and sector-specific AI challenges.

A key ask is a national Compute Credit programme that would allow startups, researchers and labs to access subsidised GPU and cloud hours on India-based platforms. “Funds should also be allocated to build and operate large shared AI compute centres,” Bindra adds, alongside enhanced R&D support through tax credits, direct grants and deep-tech seed or matching funds. Continued backing for IndiaAI Foundation Models, open-source AI initiatives and global research collaborations is also critical, he says, as is earmarked funding for AI use cases in public health, agriculture, education and smart cities. Extending the PLI scheme to emerging areas such as AI, space and robotics could further catalyse private investment.

Vijay Kumar, CEO, Express Industry Council of India: As the Union Budget 2026 approaches, it is important to align courier regulations with the scale and potential of the express sector, which has reached a market size of about USD 9 billion in FY25 and is expected to more than double by FY30. Removing the ₹10 lakh value cap on courier exports, permitting advance filing for express imports, allowing perishables and regulated goods through ECCS, within existing RMS, ICEGATE and audit frameworks. These measures will immediately reduce dwell time, lower logistics costs, and enable exporters to meet time-definite global delivery commitments without compromising revenue or security.

Karan Agarwal, Director, Srijan Realty: As we look ahead to the Union Budget 2026, we are hopeful of a policy environment that supports long-term, sustainable growth across India’s real estate landscape. Streamlined regulations and a stronger focus on ease of doing business can meaningfully improve execution efficiency across both residential and commercial developments, enabling developers to plan and deliver with greater certainty.

Continued emphasis on infrastructure-led development and integrated urban planning will be significant for markets such as Kolkata and the wider Eastern India region, where improved connectivity and planned growth can unlock substantial opportunities. Policies that encourage sustainable construction, green buildings, and technology adoption will further enhance asset quality and investor confidence. A stable, forward-looking framework will help the industry create resilient, future-ready developments that contribute to economic growth and balanced urban expansion.”

Vijay Kumar Aggarwal, Founder, Medicef Pharma: Over the past years, the government has played a pivotal role in advancing India’s pharmaceutical ecosystem through targeted policy interventions such as the Production Linked Incentive schemes for bulk drugs and pharmaceuticals, the Promotion of Bulk Drug Parks, and the continued thrust on Make in India and Atmanirbhar Bharat. These initiatives have strengthened domestic manufacturing, reduced import dependence, and enabled homegrown pharma companies to scale quality-driven operations.

Building on this progress, we remain optimistic that the upcoming budget will further reinforce support for indigenous manufacturers, enhance backend infrastructure, and accelerate investments in research and innovation. Sustained policy focus will be key to positioning India as one of the world’s largest and most trusted producers of high-quality medicines, while ensuring equitable availability across rural, semi-urban, and urban markets.

Prateek Gupta, Tech Founder & Gaming Growth Strategist: India’s startup landscape has emerged as one of the world’s most dynamic, with over 200,000 DPIIT-recognised startups driving innovation and job creation across sectors in 2025. This momentum has been further underscored by India becoming the most active IPO market globally, with 20 VC-backed startups going public and 28 unicorns turning profitable last year, this is a clear signal that entrepreneurial ambition is now backed by real market opportunities. As we approach Budget 2026, we hope policymakers will double down on incentives for sustainable scaling, including simpler compliance frameworks, enhanced access to early-stage capital, and targeted support for deep-tech, AI and export-oriented ventures, so that Indian founders can continue to build globally competitive companies.

Konark Trivedi, Founder and MD, Frog Innovations Ltd: India’s telecom sector continued its strong momentum into FY26, building on a projected record $35 billion in revenues in FY25, driven by tariff increases and expanding data usage across the country. The rapid rollout of 5G has significantly expanded high-speed connectivity, reaching most districts and serving tens of millions of users, while continued network investment is helping bridge the urban-rural digital divide.

At the same time, rural digital access is being improved through initiatives like BharatNet, which is progressively extending broadband connectivity to a large number of Gram Panchayats nationwide. Frog Innovations Limited is proud to contribute to this ecosystem with advanced 4G/5G coverage solutions tailored for both large venues, such as airports, metro stations, stadiums, and corporate campuses, and smaller enterprise and community locations, including corporate offices, bank branches, and SOHO environments. Our technology helps ensure reliable mobile connectivity where it matters most, supporting digital adoption, economic activity, and quality of life across diverse user segments.

The telecom industry is poised to play an even greater role in India’s growth story over the coming decade, and our focus remains on building sustainable, high-performance network infrastructure that enables jobs, empowers startups, and underpins India’s evolution toward global 6G leadership."

Gurpal Singh Chawla, Managing Director, TREVOC Group, says "Infrastructure remains the single biggest value creator for real estate. We are witnessing its transformative capacity in NCR suburbs like Sonipat. When expressways, metro connectivity and social infrastructure move in sync, buyers naturally start eyeing the region from a new perspective. We are hopeful that, like the previous ones, the upcoming budget will sustain this capital expenditure momentum while also supporting easier credit flow through stable interest rates. Long-term infrastructure policy allows developers to plan better, unlock the potential of new micro-markets, and deliver projects that mature steadily rather than spike on speculative sentiment."

Kausthub Kaundinya, CEO & Co-Founder, Jarsh Safety: As India’s manufacturing sector prepares for Union Budget 2026–27, there is a critical opportunity to priorities industrial safety as a strategic driver of productivity and human capital protection. The Indian industrial safety market is projected to grow rapidly, with smart PPE, AI-enabled helmets, and connected safety solutions becoming increasingly essential in factories, construction sites, and manufacturing plants.

Yet, adoption remains limited due to high upfront costs and regulatory gaps. We urge the government to support this sector through PLI incentives for safety tech manufacturing, enhanced R&D deductions for innovation, and capital subsidies for MSMEs deploying predictive safety solutions. Strengthening certification frameworks and promoting data-driven compliance will further accelerate adoption. By backing smart safety with targeted fiscal policies, India can reduce workplace accidents, enhance productivity, empower workers, and position itself as a global leader in Industry 4.0-ready, human-centric manufacturing.

India's aluminium demand is likely to remain strong as the government is expected to continue its emphasis on infrastructure development and power sector expansion in the upcoming Union Budget, said National Aluminium Company Ltd (NALCO) Chairman and Managing Director Brijendra Pratap Singh.

"When infrastructure development comes, the requirement of the power sector will also grow, and these two areas are the biggest drivers of aluminium demand," he told ANI in an exclusive interview.

He said that as the vision of the government is to make India a Viksit Bharat by 2047, and for that, every budget the country is seeing a lot of thrust on infrastructure development.

Continued government capital expenditure on infrastructure, transmission networks and urban development would jack up aluminium consumption, particularly in conductors, cables and construction-linked segments, he said.

He added that policy support for power and energy transition would be critical for sustaining growth in the aluminium sector.

Sunil Agarwal, Co-founder and Chairman, Joy Personal Care (RSH Global): As we approach the Union Budget 2026, we remain positive with expectations of policies that not only sustain the current recovery in consumption but also unlock the next wave of growth for the FMCG sector. The sector enters the year with positive momentum with early signs of consumption recovery, driven by easing inflation, improved affordability through tax reforms, and steady demand growth across both rural and urban markets. As consumer preferences evolve and premiumisation gains traction, supportive policies will be key to accelerating demand.

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.

Such forward-looking reforms will play a vital role in positioning the FMCG ecosystem for long-term competitiveness while enabling inclusive consumption expansion across markets.

The Union Budget for 2026-27 will reportedly consider granting infrastructure status to aircraft under the asset category to support the expansion of India’s aviation sector. As per industry sources cited in a report by the Hindu Business Line, this could significantly ease financing constraints for airlines. Read more

Gaurav Maheshwari, CFO, Alankit Limted: As we approach the upcoming Union Budget, tax experts anticipate a forward-thinking agenda from the Finance Minister that prioritizes simplification and ease of compliance. Streamlining tax slabs, reducing procedural complexities, and leveraging technology for seamless filings would enable businesses to focus on innovation rather than red tape. Stability in corporate tax rates remains equally critical to foster predictability and long-term investment confidence.

Tax policy must also function as a strategic enabler. Targeted measures to support MSME exporters—such as incentives on incremental export profits, faster and time-bound tax refunds, and simplified, WTO-compliant export-linked benefits—can significantly ease working capital pressures and encourage global expansion. A clear 3–5-year policy roadmap would further strengthen planning confidence and accelerate export-led growth.

Equally important is recognising the National Pension System as a workforce sustainability tool, not merely a tax-saving instrument. Allowing employee contributions under Sections 80CCD(1) and the additional ₹50,000 under Section 80CCD(1B) in the New Tax Regime would strengthen retirement preparedness, enhance long-term capital formation, and improve the regime’s attractiveness without adding complexity.

Together, these calibrated reforms would reinforce investor confidence, support inclusive growth, and align India’s tax framework with the Amrit Kaal vision of resilient households, competitive enterprises, and sustainable economic prosperity.”

Bikash Kumar Mishra, CFO, Easy Home Finance: As Budget 2026 approaches, housing remains one of the most effective levers for driving inclusive economic growth. Industry and regulatory trends indicate that over 70% of incremental housing demand is now coming from first-time buyers and middle-income families, particularly in the ₹25–60 lakh property segment. The aspiration to own a home is strong, but access to affordable and predictable credit continues to be uneven.

From a financing standpoint, the challenge is less about demand and more about friction. Industry estimates suggest that documentation and verification alone can still add two to three weeks to the home-loan process, creating uncertainty for buyers and developers alike. Budget support that strengthens digital credit infrastructure and standardised verification can materially improve access without increasing systemic risk.

Affordability remains another pressure point. RBI and NHB data show that EMIs as a share of household income have steadily increased over the past five years, while property prices in several markets have grown faster than incomes. In this context, targeted tax support can play a meaningful role. For instance, enhancing the current ₹2 lakh deduction on home-loan interest under Section 24(b) to ₹3–4 lakh for first-time buyers could significantly ease monthly cash-flow stress for middle-income households. Such a measure would directly support genuine end-users rather than speculative demand.

Capital flow into housing finance is equally important. Housing finance companies and co-lending models are increasingly responsible for serving non-metro and self-employed borrowers. Policy clarity that enables long-term funding access and stable co-lending frameworks can help lenders lower their blended cost of funds and pass on benefits through better pricing and loan structures.

Budget 2026 has the opportunity to strengthen homeownership not by encouraging higher leverage, but by improving access, transparency, and certainty. A data-led approach that reduces process friction and offers targeted tax relief can make homeownership more achievable for first-time buyers while maintaining long-term financial discipline across the housing ecosystem.

Vamsi Vikas, Founder and Managing Director of Raghu Vamsi Aerospace Group: India today does not suffer from a lack of intent or ambition in defence manufacturing. Over the years, industry has developed meaningful capabilities, created robust infrastructure, and nurtured specialised talent aligned with clearly identified defence priorities. What now requires equal attention is the sustainability of this ecosystem as it moves from promise to performance.

The cost and risk borne by industry in taking a technology beyond early production are often underestimated. From practical experience, the most fragile phase of any defence programme is the transition from initial production to scale. This is the stage at which development timelines tend to stretch, costs escalate due to refinements and testing, and programme momentum can weaken.

Similarly, capital investments made by industry in defence manufacturing are inherently long term in nature and expenditure is uneven across budget cycles. Hence disrupts capacity planning, quality systems, compliances, and after-sales support though the overall budget allocation appears stable.

On the exports front, there is today genuine global interest in sourcing defence systems from India. However, exporting defence equipment cannot be treated as an extension of domestic procurement. To be credible in international markets, industry must invest upfront in regulatory compliance, certifications, disciplined documentation practices, and long-term maintenance and support infrastructure.

A Union Budget that recognises these realities, without micromanaging execution, can strengthen national security while creating long-term economic value.

Neeraj Jain, CFO, Quess Corp: India’s demographic dividend will only translate into growth if employability keeps pace with scale. As we approach Budget 2026, the focus must shift from job numbers to job readiness and formalisation. Rationalising the 18% GST on manpower staffing would significantly lower barriers to formal employment and expand social security coverage. Similarly, Section 80JJAA should reflect the current wage realities and aligning it with the Employment Linked Incentive framework would meaningfully support hiring. Greater predictability in tax assessments is also critical, high-pitched assessments disrupt cash flows and create avoidable uncertainty. Ultimately, growth must be measured not just by GDP, but by the quality and sustainability of employment created.

Historical trends suggest domestic equity markets often see muted performance in the immediate period surrounding the event. Analysis of past data indicates that market returns in the one-month window before and after the Budget have generally been weak, while returns over longer periods of three and six months have been significantly stronger.

Since the Modi government came to power in 2014, 14 Budgets, including interim ones, have been presented. During this period, the Sensex and Nifty recorded negative returns in 10 instances in the month leading up to the Budget and in seven instances in the month following it. On average, one-month returns declined by around 0.4% before and 0.5% after the Budget. Find out more here.

Moreover, MAIT has recommended cutting tariffs on audio components such as microphones, speakers, and receivers from 15% to 10% and removing duties on inductor coil inputs to boost local value addition. The industry body also urged strategic measures in ICT adoption, AI integration, and credit support for startups, MSMEs, and export-focused firms amid global supply chain disruptions and trade uncertainties.

To sustain mobile manufacturing, MAIT called for extending incentives under the Production-Linked Incentive (PLI) scheme, ending March 31, 2026, emphasizing the need to expand India’s domestic capacity for both consumption and exports.

Meanwhile, the IT industry body MAIT has called on the Centre to reduce import duties on critical electronic components and boost tax incentives to strengthen domestic manufacturing and global competitiveness.

In its pre-Budget recommendations to the Finance and IT ministries, the Manufacturers’ Association for Information Technology (MAIT) proposed cutting the basic customs duty (BCD) on key sub-assemblies, including camera modules, display assemblies, and connectors, from 10% to 5%. The move aims to lower input costs for Indian manufacturers and enhance their global competitiveness.

Ahead of the Union Budget 2026–27, investors and market participants have called on the government to ease capital market taxation, particularly by raising the exemption limit on long-term capital gains (LTCG), according to PTI. They have also urged authorities to avoid any further hikes in transaction-related taxes.

Stakeholders have highlighted the need for greater tax relief for retail and long-term investors. Know more.

As Budget 2026 draws near, a key question on taxpayers’ minds is whether the government will phase out the old tax regime. With the new tax system now set as the default and successive budgets gradually enhancing its appeal, debates over the relevance of the old regime have intensified.

The new tax regime features lower slab rates, simpler compliance procedures, and fewer exemptions, positioning it as the preferred option for India’s changing tax base. Despite these incentives, a significant number of taxpayers continue to opt for the old regime, keeping the discussion alive ahead of the upcoming Budget. Learn more.