Indian Budget 2026 Highlights

* Fiscal Deficit: FY26 stands at 4.4 per cent of GDP, while markets are looking for an FY27 target close to 4 per cent along with a clearer debt-reduction roadmap.

* Capital Expenditure: From Rs 11.2 lakh crore in FY26, capital expenditure could rise by 10–15 per cent, potentially crossing Rs 12 lakh crore.

* BioPharma Strategy: The BioPharma Strategy for Health Advancement through Knowledge, Technology and Innovation would help strengthen India’s digital ecosystem in healthcare.

* Biopharma Shakti with an outlay of ₹10,000 crore, which will include a biopharma-focused network featuring three new institutes

* The India Semiconductor Mission will be expanded with the launch of ISM 2.0, while the outlay for electronics component manufacturing will be raised to ₹40,000 crore to boost domestic production and innovation.

* Following the launch of the rare earth permanent magnet scheme in November 2025, Nirmala Sitharaman announced support for Odisha, Kerala, Andhra Pradesh and Tamil Nadu to set up dedicated rare earth corridors.

* Finance Minister Nirmala Sitharaman proposed the Mahatma Gandhi Gram Swaraj Initiative to strengthen the khadi, handloom, and handicrafts sectors. The initiative will offer global market linkages and branding support, while streamlining training, skilling, and quality standards, and is expected to benefit weavers, village industries, the One District One Product (ODOP) programme, and rural youth.

* Finance Minister Nirmala Sitharaman proposed a five-part integrated programme for the textile sector, including the National Fibre Scheme, the Textile Expansion and Employment Scheme, and the National Handloom and Handicraft Programme to boost self-reliance, modernisation, and artisan support.

* Finance Minister Nirmala Sitharaman outlined interventions across six key areas: scaling up manufacturing in strategic and frontier sectors, revitalising legacy industries, creating champion MSMEs, giving a strong push to infrastructure, ensuring long-term security and stability, and developing city economic regions.

* Capital expenditure (capex) for FY27 has been increased to ₹12.2 lakh crore.

* New dedicated freight corridors will be established to link Dangkuni in the east with Surat in the west. In addition, 20 new national waterways will be made operational over the next five years to promote environmentally sustainable cargo transport.

* The Union Budget has announced a major push for environmentally sustainable passenger transport, proposing the development of seven high-speed rail corridors linking key urban and economic centres. These corridors are expected to serve as growth connectors by reducing travel time, lowering emissions, and supporting regional development. The proposed routes include Mumbai–Pune, Pune–Hyderabad, Hyderabad–Bengaluru, Hyderabad–Chennai, Chennai–Bengaluru, Delhi–Varanasi, and Varanasi–Siliguri, connecting major financial hubs, technology centres, manufacturing clusters, and emerging cities with faster and cleaner mobility.

* A high-powered Education-to-Employment Enterprises Standing Committee will be established to bolster India’s services sector. It will focus on identifying high-potential areas for growth, job creation, and export opportunities, with the goal of positioning India as a global services leader.

* A high-level banking committee will be set up to steer reform-led growth, as Indian banks report strong balance sheets, record profits, and improved asset quality with over 98% coverage.

* The Budget also focuses on non-banking finance companies (NBFCs), outlining a vision with clear goals for expanding credit and enhancing technology adoption. To boost efficiency, the government plans to restructure public sector NBFCs into larger, stronger entities, similar to the Power Finance Corporation and the Rural Electrification Corporation.

* The government aims to align foreign investments with economic priorities by enhancing the corporate bond market through a market-making framework and total return swaps. Municipal bonds will be promoted by offering ₹100 crore incentives to larger cities for single issuances above ₹1,000 crore under the Amrit scheme.

* Launch initiatives to strengthen evidence-based research, training, and awareness in traditional medicine.

* Expand veterinary education and services by adding over 20,000 professionals through a loan-linked capital subsidy scheme for private veterinary and para-veterinary colleges, hospitals, diagnostic labs, and breeding facilities.

* Promote collaboration between Indian and foreign institutions in animal husbandry.

* Support India’s Orange Economy, covering animation, visual effects, gaming, and comics sectors

* The Animation, Visual Effects, Gaming and Comics (AVGC) sector is projected to need 2 million professionals by 2030. To meet this demand, the government plans to support the Indian Institute of Creative Technologies, Mumbai, in setting up ABGC content creator labs in 15,000 secondary schools and 500 colleges nationwide.

* To cater to the growing Indian design industry, a new National Institute of Design will be established in Eastern India through a challenge route to strengthen design education and development.

* In higher education, the government will assist states in creating five university townships near major industrial and logistics corridors. These academic zones will comprise multiple universities, colleges, research institutions, skill centres, and residential facilities.

* The Union Budget has placed tourism at the centre of India’s growth and employment strategy, recognising its potential for job creation, foreign exchange earnings, and local economic development.

Key initiatives include:
* National Institute of Hospitality: Upgrading the National Council for Hotel Management and Catering Technology to enhance training and standards in hospitality.

* Skilling: A pilot scheme to train 10,000 tourist guides at 20 iconic sites through a 12-week hybrid programme with the Indian Institute of Management.

* Digital tourism: Establishment of a National Destination Digital Knowledge Grid to document culturally, spiritually, and historically significant sites, creating jobs for local researchers and content creators.

* Eco- and nature tourism: Development of sustainable mountain trails in Himachal Pradesh, Uttarakhand, Jammu & Kashmir, Araku Valley, and Pudigai Malai, along with wildlife trails for turtles in Odisha, Karnataka, Kerala, and bird-watching near Pulicat Lake.

* The government will launch NIMHANS 2.0 to create a premier mental health institute in North India.

* Plans include developing reservoirs and creating market linkages involving startups, women-led groups, and fish farmer producer organizations.

* In animal husbandry, the focus will be on generating quality employment in rural and peri-urban areas through a credit-linked subsidy scheme, modernizing and scaling livestock enterprises, building integrated livestock, dairy, and poultry value chains, and promoting livestock farmer producer organizations.

* For high-value agriculture, support will be extended to crops such as coconut and sandalwood to diversify farm outputs, boost productivity, raise farm incomes, and create new employment opportunities.

* Building on the success of the Lakpati Didi program, the government aims to support women in transitioning from credit-linked livelihoods to enterprise ownership. Self-help entrepreneur marts will be set up as community-owned retail outlets within cluster-level federations, backed by enhanced and innovative financing, empowering women to advance in entrepreneurship.

* Divyangjan Kaushal Yojana to provide dignified livelihood opportunities for divyangjan.

* Three new All India Institutes of Ayurveda, upgrades to AYUSH pharmacies and drug testing labs, and enhancement of the WHO Global Traditional Medicine Centre in Jamnagar.

* Emerging Technologies and Technology Missions: AI and other advanced technologies, along with initiatives like AI missions, National Quantum Mission, Anusandhan National Research Fund, and R&D and Innovation Fund, are being promoted as key drivers of inclusive growth and national development.

* Setting up of the Khelo India Mission to systematically nurture sports talent and transform the sports sector over the next decade, creating employment and skill opportunities.

* The Income Tax Act, 2025, will come into effect from April 1, with rules and tax return forms to be notified soon.

* No interest liability will arise for taxpayers on penalty amounts during the period of appeal before the first appellate authority, irrespective of the outcome.

* The Finance Minister proposed extending the timeline for revising tax returns from December 31 to March 31 with a nominal fee. She also suggested staggering the filing deadlines: individuals filing ITR-1 and ITR-2 would continue to have time until July 31, while non-audit business cases and trusts would be allowed to file by August 31.

* Tax Collected at Source (TCS) on overseas tour packages cut to 2%, LRS remittances for education and medical expenses reduced to 2%, and TDS on manpower services clarified at 1–2% to ease tax burden.

* A dedicated programme will be launched for Indian cashew and cocoa to make India self-reliant in raw cashew and coconut production and processing, enhance competitiveness, and position Indian cashew and cocoa as premium global brands by 2030.

* On sandalwood, the Finance Minister noted that it is closely tied to India’s social and cultural heritage, and the government will collaborate with state governments to promote focused cultivation and post-harvest processing to revive the Indian sandalwood ecosystem.

* To rejuvenate old, low-yielding orchards and expand high-density cultivation of walnuts, almonds, and pine nuts, a dedicated programme will support farmers by enhancing incomes, adding value, and engaging youth in these initiatives.

* The government has proposed granting immunity from prosecution to individuals who fail to disclose non-immovable foreign assets valued under ₹20 lakh. This exemption, effective retrospectively from October 1, 2024, aims to simplify compliance for holders of small-value foreign assets.

* Union Budget fast-tracks APAs to two years with modified returns for associated entities, and offers foreign cloud service providers using Indian data centres a tax holiday until 2047.

* The government has proposed that TDS on immovable property sales by non-residents will be deducted and deposited by resident buyers using their PAN-based challan, removing the need for a TAN and simplifying compliance.

* The government has proposed a Rs 20,000 crore outlay over the next five years to support Carbon Capture, Utilization, and Storage (CCUS) technologies, aiming to scale up projects and enhance technology readiness for broader applications across sectors.

* Finance Minister Nirmala Sitharaman announced the establishment of over 1,000 accredited clinical trial sites across India, a credit-linked subsidy programme to support livestock farmer producer organisations, the launch of Bharat Vistar, a multilingual AI tool to integrate the agri-stack, and She Marts, community-owned retail outlets to empower local entrepreneurs.

* Public capital expenditure has been raised to Rs 12.2 lakh crore for FY 2026–27. The government will establish dedicated REITs to accelerate the recycling of major real estate assets of CPSEs, while an Infrastructure Risk Guarantee Fund will provide carefully calibrated partial credit guarantees to lenders.

* An allocation of Rs 5,000 crore over five years has been earmarked for developing City Economic Regions. Additionally, a Coastal Cargo Promotion Scheme aims to increase the share of inland waterways and coastal shipping from 6% to 12% by 2047.

* Duty-free import limit for specified seafood processing inputs raised from 1% to 3% of last year’s export turnover, and extended to shoe uppers along with leather and synthetic footwear exports.

* India’s IT sector, a global leader in software development, IT-enabled services, knowledge process outsourcing, and contract R&D, will now have all these segments grouped under a single category called Information Technology Services. A uniform safe harbour margin of 15.5% will apply, and the threshold for availing safe harbour has been raised from ₹300 crore to ₹2,000 crore.

* The government has proposed cutting tariffs on all dutiable goods for personal use from 20% to 10%, reducing costs for individuals and promoting personal imports.

* The government has proposed granting a basic customs duty exemption on capital goods imported for processing critical minerals in India.

* The government has proposed to extend the basic customs duty exemption on goods imported for nuclear power projects until 2035 and to expand it to cover all nuclear plants, regardless of capacity.

* The government has proposed to exempt basic customs duty on raw materials imported for manufacturing aircraft parts intended for maintenance, repair, or overhaul by defence sector units.

* Finance Minister Nirmala Sitharaman proposed extending the basic customs duty exemption on capital goods used for manufacturing lithium-ion cells to also include battery energy storage systems. Additionally, imports of sodium antimonate for solar glass production will be exempt from basic customs duty, supporting clean energy and storage infrastructure.

* The Union Budget 2026 includes initiatives to promote astrophysics and astronomy through immersive learning experiences, including the establishment or upgrading of telescope infrastructure nationwide. Key projects include the National Large Solar Telescope, National Large Optical Infrared Telescope, Himalayan Chandra Telescope, and Cosmos 2 Planetarium.

* Fish caught beyond India’s territorial waters and landed abroad will be treated as exports and eligible for duty-free status.

* The Indian government has proposed a ₹20,000 crore outlay over the next five years to strengthen urban infrastructure in tier-II and tier-III cities, including temple towns, as part of efforts to unlock their economic potential.