Union Budget 2026: Industry seeks growth, innovation, and execution-focused policies

Ahead of the Union Budget 2026, Indian startups, businesses, policymakers, and emerging sectors are united in calling for a framework that enhances execution, clarifies regulations, and supports long-term innovation across the economy. 

Industry leaders across sectors are calling for a budget that strengthens India’s execution capacity while enabling long-term, innovation-led growth. 

Deeptech and manufacturing stakeholders emphasise the need for shared testing and certification infrastructure, predictable regulatory pathways, and incentives that recognise long development cycles. 

Leaders in consumer markets and private capital highlight the importance of boosting domestic consumption through fiscal stability, targeted tax relief, and clearer rules under the new Income Tax Act.

Digital-first sectors—including the creator economy, fintech, AI, and virtual digital assets—seek simplified taxation, reduced TDS burdens, stronger digital public infrastructure, and support for platforms driving monetisation, compliance, and security. 

Logistics, EV mobility, and green transport players expect incentives for AI-driven freight networks, EV corridors, multimodal hubs, and sustainability-focused infrastructure. 

Export-oriented and manufacturing sectors—from toys to cybersecurity and enterprise SaaS—are aiming for stronger international market access, local procurement enforcement, and clarity in fund deployment for government-backed capital initiatives.

Agritech and rural economy voices stress the need for support to digital agriculture missions, alternative rural credit frameworks, decentralised storage, and climate-resilient infrastructure.

Environmental stakeholders urge prioritisation of water security as a national agenda. Investors also call for reforms in angel investing norms, AIF taxation, and extended eligibility for deeptech startups.

YourStory gathers insights from various stakeholders ahead of the Union Budget 2026 on February 1, shedding light on their expectations and priorities.

Ankit Kedia, Founder and Lead Investor, Capital-A

Scaling deeptech and manufacturing requires support through long development cycles, certification, validation, pilots, and early deployments, especially in sectors where safety and reliability drive adoption. Budget 2026 should strengthen this ecosystem via shared testing infrastructure, predictable regulations, and long-gestation incentives, enabling domestic companies to compete globally and attracting more domestic institutional and family office investment for sustained industrial capability and value creation.

Jayesh Bavle, Chief Financial Officer, Bertelsmann India Investments

Amid global geopolitical uncertainties, strengthening domestic production and consumption is increasingly important. Current macroeconomic conditions, low inflation, and a controlled fiscal deficit provide an opportunity to introduce initiatives that boost consumption.

On taxation, we do not expect sweeping changes and welcome the transition to the new Income Tax Act. Its simplified structure will be crucial, and greater clarity in the rules will support effective implementation, compliance, and confidence among businesses and taxpayers.

Ramki Gaddipati, CEO APAC and Global CTO, Zeta

Recognising India’s digital public infrastructure (DPI) as mission-critical in the Union Budget 2026 would underscore its role in driving productivity and national competitiveness. Legacy banking systems limit agility and increase operational risks, and time-bound fiscal incentives, such as accelerated depreciation or targeted capex, can help modernise core processes, digital experiences, and risk platforms.

AI and fintech require affordable compute, robust R&D, and innovation-linked tax benefits to scale.

Additionally, stronger cybersecurity frameworks, including a national command, are essential to safeguard trust and ensure secure, large-scale digital adoption.

Ashish Singhal, Co-founder, CoinSwitch

India’s virtual digital assets ecosystem is at a critical stage, but the current tax framework poses challenges by taxing transactions without recognising losses, creating friction for retail participants. Reducing the tax deducted at source on VDA transactions from 1% to 0.01% and raising the threshold to Rs 5 lakh would improve liquidity, ease compliance, and protect small investors while maintaining traceability. 

Budget 2026 presents an opportunity to review the VDA taxation framework in a way that benefits both investors and the government, ensuring fairness and encouraging responsible participation.

Ankush Sabharwal, Founder and CEO, CoRover

We expect the Union Budget 2026 to recognise AI as core digital infrastructure for India’s growth. While initiatives like IndiaAI and DPI-led innovation have laid the groundwork, targeted incentives are needed for indigenous LLMs, agentic AI platforms, and sovereign AI stacks designed for India’s languages and use cases. 

Budget allocations should support GPU infrastructure, sandbox environments for regulated sectors, and outcome-based incentives for AI deployment in public services, MSMEs, and Bharat-focused solutions. With the right focus on talent, compliance, and computation, India can democratise AI access for all citizens and position itself as a global hub for applied AI in 2026.

Gaurav Jalan, Founder and CEO, mPokket

As Budget 2026 approaches, there is an opportunity to strengthen the digital and institutional foundations for credit-led participation. The digital credit ecosystem has reached an inflection point, with small-ticket loans used for skills, education, healthcare, and early-stage entrepreneurship, moving beyond short-term needs. Policy support can help expand access, ensure responsible lending, and empower this segment to drive inclusive economic growth.

Rohit Mahajan, Founder and Managing Partner, plutos ONE

Fintech should be recognised as the backbone of India’s economy, not just as startups… Now, the focus should shift to strengthening core infrastructure such as NPCI, Bharat Connect, and BBPS through investments in resiliency, cybersecurity, and interoperability. 

Supporting MSMEs and Bharat through invoice-based, data-driven financial products is critical for inclusive growth. A forward-looking Budget 2026 can enable Indian fintech companies to emerge as global players while preparing the domestic market for new financial products, driving adoption, efficiency, and resilience across the economy.

Vaibhav Gupta, Co-founder and Chief Product Officer, KlugKlug

Targeted policy support is needed to help the creator economy mature into a structured, scalable digital industry. Clear taxation norms, incentives for creator-tech platforms, and simpler compliance for creator-led enterprises can accelerate monetisation and formalisation. 

Dhruv Taneja, Founder and Global CEO, MatchLog

India should prioritise digital innovation and sustainability in inland container logistics to support rising exports and the $2 trillion growth target. Incentives for AI-driven platforms, EV trucking corridors, and Gati Shakti multimodal hubs can reduce empty miles by 15%, cut emissions, and optimise supply chains… Scaling such outcomes nationally requires investment in technology-led freight networks, shared inland infrastructure, and stronger multimodal linkages. 

Aditya Krishnakumar, Co-founder, BIDSO

The Government’s National Action Plan for Toys has shown consistent commitment, reinforcing confidence in the industry. The 2025 Budget strengthened this momentum by supporting India’s goal to become a global hub for high-quality, self-reliant toy manufacturing… The upcoming Union Budget presents an opportunity to advance such initiatives, whether through the PLI or other targeted manufacturing incentives.

These measures are crucial for developing toy manufacturing clusters, enhancing workforce skills, and building a sustainable ecosystem capable of producing globally competitive toys, supporting India’s ‘Make in India’ vision.

Paresh Parekh, Partner and National Leader – Tax, Consumer Products and Retail Sector, EY India

The Union Budget 2026-27 is expected to focus on supporting the retail and consumer products sector, ensuring it remains a strong pillar of India’s economy. Key areas include promoting manufacturing, boosting MSME retail activities, and enhancing digital payments to ease business operations. Targeted fiscal relief through lower personal taxes can strengthen consumer sentiment and stimulate retail growth… Challenges persist due to the inverted tax structure, where inputs, capital goods, and services are taxed at 18% while some finished goods are taxed at 5%, causing GST credit accumulation. Addressing this in the budget could provide significant relief to the sector.

Gaurav Garg, Research Analyst, Lemonn Markets Desk

The Union Budget 2026 is expected to be cautious and tightly balanced, focusing on strategic priorities rather than large announcements. With tax revenues under pressure from last year’s income tax relief, the government will aim to fund rising needs, particularly defence, renewable energy, and semiconductors, while maintaining fiscal discipline. 

Abhinav Kalia, CEO and Co-founder, ARC Electric

As India prepares for Budget 2026, the electric mobility sector is ready to move beyond pilots and fleets toward mainstream commercial adoption. Practical, targeted, and demand-driven policy support is essential.

Key expectations include enhanced incentives for charging infrastructure in commercial and institutional hubs to encourage fleet transitions, financial support such as tax benefits or accelerated depreciation to improve the affordability of electric corporate vehicles, and rationalisation of GST, along with clearer regulations for battery disposal and second-life reuse to reduce operational complexity. 

Amith Agarwal, Co-founder and CEO, Staragri

Indian agriculture needs deeper digitisation, stronger technology adoption, and greater farmer participation online. Support for the Digital Agriculture Mission, including AI-based crop monitoring, GPS-driven farm mapping, and drone-enabled interventions, can accelerate this transformation. 

Additionally, we urge the Finance Minister to consider a policy or committee to create an alternative rural credit framework that reflects farmers’ incomes and financial behaviour. Agri- and rural-focused NBFCs should receive differentiated ratings and higher lending limits, as a uniform approach for rural and urban NBFCs does not adequately serve India’s agricultural economy.

Vinay Bansal, CEO and Founder, Inflection Point Ventures

Budget 2026 provides an opportunity to boost innovation, job creation, and value creation by expanding angel investing in India. Professionals and small investors should be able to contribute meaningfully to startups, build diverse portfolios, share expertise, and participate in returns, similar to investing in publicly traded companies. 

While investor protection is important, current accredited investor norms may become restrictive as the startup ecosystem grows. Existing SEBI guidelines on trust and transparency are sufficient to allow small investors to contribute more than just capital, supporting startups’ growth while benefiting from potential returns, thereby strengthening India’s innovation ecosystem and fostering sustainable economic development.

Pankit Desai, Co-founder and CEO, Sequretek

To strengthen ‘Make in India,’ government departments must prioritise local procurement, with clear enforcement to prevent bias toward multinational products. For exports to grow, Indian companies need stronger support in accessing international markets, including financial resources, skilled manpower, and sponsorship for global trade participation. 

While funds for AI and cybersecurity exist, their operational use requires clarity. The Union Budget should focus on boosting cyber efficiency through Indian companies, and a dedicated fund, modelled on frameworks like the Fund of Funds, can channel resources effectively, driving tangible progress in cybersecurity. Such measures will enhance domestic capabilities, global competitiveness, and the strategic impact of India’s technology ecosystem.

Anand Chandra, Co-founder and Executive Director, Arya.ag

For Budget 2026, continued support for decentralised infrastructure, inclusive finance, and stronger FPOs is essential to strengthen the rural economy and build climate resilience. Agritech startups are driving precision and scale through drones, AI-based quality grading, and climate advisories, but these solutions must remain simple, affordable, and effective for smallholders. With the right support, such innovations can enhance productivity, reduce losses, create livelihoods, and ensure technology delivers lasting value at the last mile.

Anirudh A. Damani, Managing Partner, Artha Venture Fund

Deeptech sectors, like semiconductors and spacetech, require long innovation and capital cycles, and frameworks must reflect this. Extending DPIIT startup recognition from 10 to 15 years is critical, as it ensures continued access to domestic institutional capital from AIFs, angel funds, and government-backed platforms. Clarity on the Fund of Funds disbursement is also essential to maintain liquidity amid low fundraising activity. 

Additionally, rationalising AIF taxation to prevent double taxation will encourage domestic participation. With applied AI, semiconductors, and spacetech gaining momentum, this Budget can help India secure a structural lead in the global deeptech landscape.

Amit Banka, Founder and CEO, WeNaturalists

Budget 2026 should prioritise water as a national issue, building infrastructure to capture, redistribute, and move water to drought-hit regions, akin to highways for water. Investing in forest and water systems can prevent climate migration, reduce urban crowding, safeguard livelihoods, and lower emissions at the source. Addressing the water crisis is essential for sustainable development, climate resilience, and social stability, and requires large-scale government intervention alongside roads, cities, and renewable energy initiatives.

Manoj Soni, CEO, YoloBus and Easy Green Mobility

Budget 2026 is an opportunity to strengthen intercity public transport, relied upon by millions daily. Increased allocations for road infrastructure, smart bus terminals, and digital ticketing can improve safety, efficiency, and passenger experience. Policy support for EV adoption, cleaner fuels, charging infrastructure, and financing can accelerate fleet modernisation, reducing operating costs and emissions. Focusing on green intercity transport will ensure affordable, reliable, and sustainable mobility for nearly 50 million passengers, while contributing to India’s climate goals and net-zero commitments.

Ankush Tiwari, Co-founder and CEO, pi-labs

Amid rising geopolitical and security challenges, the defence and internal security sector seeks an execution-focused Budget 2026 with multi-year capital allocations for indigenous AI-led intelligence systems, cyber defence platforms, robotics, quantum-safe communications, and secure software. These technologies are core operational infrastructure and should be funded like physical defence assets.

 

The industry also expects incentive structures similar to Product-Linked Incentives for sovereign security technologies, supporting indigenous design, IP ownership, deployment readiness, and lifecycle support. Such measures will enable Indian companies to move beyond pilots, invest confidently in R&D, reduce dependence on imports, and build sustainable, mission-critical capabilities that strengthen India’s long-term security.

Rahul Dwivedi, Founder and CEO, Pelorus Technologies

Budget 2026 should focus on strengthening indigenous defence and internal security capabilities, with higher allocations for AI-led intelligence systems, cyber forensics, and counter-drone technologies deployable at scale. Sustained R&D funding, faster procurement, and support to move proven AI systems from pilots to long-term deployment are critical. Policy frameworks should promote real-world adoption through pilot programmes, long-term models, and public-private collaboration, alongside investments in secure data infrastructure, compute, and specialised talent. Prioritising indigenous innovation will enhance operational readiness, reduce import dependence, and secure India’s long-term strategic and technological autonomy.

Archana Jahagirdar, Founder and Managing Partner, Rukam Capital

For Budget 2026, startups expect deeper support through simpler compliance, clearer tax frameworks, dual listing facilitation, and stronger incentives for domestic capital. These measures can turn current policy intent into long-term outcomes, helping India build a resilient, inclusive, and globally competitive startup ecosystem.

Prasann Kedia, Managing Director, Associated Alcohols & Breweries Ltd

As Union Budget 2026 approaches, the alcobev sector seeks greater policy predictability and rationalisation in taxation and regulations. Key expectations include an alcohol-content-based tax structure to address pricing disparities and improve transparency. The industry also looks for simplified customs duties on imported raw materials, clearer import–export guidelines, and streamlined compliance to support premiumisation, global competitiveness, and ease of doing business. A stable policy environment will encourage responsible consumption, enable domestic brands to scale efficiently, attract long-term investments, and strengthen local manufacturing.

Vikram M. Raichura, Founder and MD, Helo AI

As India advances toward an AI-first digital economy, Budget 2026 should support technology-driven businesses in AI, software, and enterprise communications. Building on the Rs 10,300 crore IndiaAI Mission, higher allocations and targeted incentives can accelerate AI research, product development, and adoption. Enhanced tax incentives for R&D and measures to reduce operational costs related to AI infrastructure, cloud, data, and compliance will enable greater investment in AI and automation. Policies that create jobs, integrate AI education into curricula, and support the global competitiveness of Indian tech companies can further position India as a leading AI hub, driving innovation, talent development, and sustainable digital growth.