Budget 2026: 10 key announcements for India Inc

Feb 1, 2026

Synopsis
Budget 2026 Key Announcements: The Union Budget 2026-27 reshapes Corporate India with ten key moves. Infrastructure spending rises significantly. Manufacturing receives ecosystem capital, not just incentives. MSMEs get a substantial push for scale. Corporate tax architecture is rewritten with MAT becoming final. IT and digital services gain predictable taxation. Customs rationalisation lowers input costs. Trade logistics see faster clearances. Capital markets deepen.

Union Budget 2026–27 was presented in the language of “kartavya” and long-term nation-building. But beneath the philosophical framing, the Finance Minister laid out a set of highly specific interventions that directly recalibrate how companies manufacture, finance, comply, export and invest.

“Our first kartavya is to accelerate and sustain economic growth, by enhancing productivity and competitiveness, and building resilience to volatile global dynamics,” Nirmala Sitharaman said in Parliament.

For India Inc, that translated into ten concrete structural shifts.

10 Big Moves in Budget 2026 That Reshape Corporate India

1. Rs 12.2 Lakh Crore Infrastructure Engine

Public capital expenditure will rise to Rs 12.2 lakh crore as proposed in the Budget, up from a revised Rs 10.96 lakh crore in 2025–26 and nearly six times the Rs 2 lakh crore spent in FY2014–15.

Beyond the headline allocation, the Budget sharpens the infrastructure map:

• A new dedicated Freight Corridor linking Dankuni (East) to Surat (West)

• 20 new National Waterways over five years

• A Coastal Cargo Promotion Scheme aimed at doubling inland and coastal shipping share from 6% to 12% by 2047

• Seven new High-Speed Rail corridors connecting growth clusters

• An Infrastructure Risk Guarantee Fund to provide calibrated partial credit guarantees

For sectors such as cement, steel, EPC, logistics and real estate, the commitment signals order-book visibility and lower execution risk.

2. Manufacturing Gets Ecosystem Capital, Not Just Incentives

The Budget scales up seven strategic and frontier sectors with defined allocations:

• Biopharma SHAKTI: Rs 10,000 crore over five years to build biologics and biosimilars capacity, including three new National Institute of Pharmaceutical Education and Research and over 1,000 accredited clinical trial sites

• Electronics Components Manufacturing Scheme: Outlay enhanced from Rs 22,919 crore to Rs 40,000 crore

• Container Manufacturing Scheme: Rs 10,000 crore over five years

• Carbon Capture, Utilisation and Storage (CCUS): Rs 20,000 crore over five years

• Revival of 200 legacy industrial clusters

• Three dedicated Chemical Parks via challenge mode

• ISM 2.0 under the India Semiconductor Mission to expand into equipment, materials and full-stack design IP

This is less about assembly scale and more about upstream depth.

3. A Rs 12,000 Crore Push for MSME Scale

Recognising MSMEs as “a vital engine of growth,” the Budget introduces:

• A Rs 10,000 crore SME Growth Fund to create “future Champions”

• A Rs 2,000 crore top-up to the Self-Reliant India Fund

• Liquidity reforms include:Mandatory TReDS usage for CPSE purchases from MSMEs

• Credit guarantee support for invoice discounting

• Linking GeM with TReDS

• Introduction of TReDS receivables as asset-backed securities

Additionally, professional institutions will create a cadre of accredited “Corporate Mitras” to help MSMEs manage compliance at affordable cost, particularly in Tier-II and Tier-III towns.

The emphasis shifts from survival credit to structured growth capital.

4. Corporate Tax Architecture Rewritten: MAT Becomes Final

From 1 April 2026:

• Minimum Alternate Tax (MAT) becomes a final tax

• MAT rate reduced from 15% to 14%

• No fresh MAT credit accumulation

• Brought-forward MAT credit can be set off (up to one-fourth of tax liability) under the new regime

The move simplifies future tax computation and nudges companies toward the new regime.

Buybacks will now be taxed as capital gains for all shareholders. Promoters will pay an additional buyback tax, resulting in an effective tax of 22% for corporate promoters and 30% for non-corporate promoters.

5. IT & Digital Services Get Predictable Taxation

India’s largest services export sector receives a structural boost:

• All IT services clubbed under one category

• Safe harbour margin fixed at 15.5%

• Threshold raised from Rs 300 crore to Rs 2,000 crore

• Automated approval process

• Safe harbour continuity for five years

• Unilateral APA timeline capped at two years (extendable by six months)

Further, foreign companies providing global cloud services using Indian data centres will receive a tax holiday till 2047, provided Indian customers are serviced via a domestic reseller.

This aligns tax certainty with India’s data centre expansion ambitions.

6. Customs Rationalisation Lowers Input Costs

Customs reforms directly impact cost structures:

• Tariff on all dutiable goods imported for personal use reduced from 20% to 10%

• Basic customs duty exemptions extended for lithium-ion cell manufacturing (including energy storage systems)

• Exemption on sodium antimonate for solar glass

• Exemption on capital goods for processing critical minerals

• Nuclear power project import exemption extended till 2035

• Exemption on aircraft components and defence MRO inputs

These changes target energy, aviation, electronics and advanced manufacturing supply chains.

7. Trade Logistics: Faster, Predictable Clearances

The Budget pushes trade facilitation reforms:

• Duty deferral for Tier 2 and Tier 3 Authorised Economic Operator(s) extended from 15 to 30 days

• Advance ruling validity extended from three years to five

• Removal of Rs 10 lakh cap on courier exports

• AI-driven non-intrusive scanning expansion across major ports

• Rollout of a Customs Integrated System within two years

Reduced friction at ports translates directly into lower working capital blockage.

8. Capital Market Deepening and Funding Channels

• Fiscal consolidation continues:Fiscal deficit pegged at 4.3% of GDP in Budget 2026–27

• Debt-to-GDP estimated at 55.6%, on a downward glide path

• To deepen capital markets:Market-making framework for corporate bonds

• Introduction of total return swaps on corporate bonds

• Rs 100 crore incentive for municipal bond issuances above Rs 1,000 crore

• Individual Person Resident Outside India (PROI) investment limit increased from 5% to 10% (overall cap 24%)

The message: broaden funding channels beyond bank credit.

9. Energy Transition Backed by ₹20,000 Crore

The Rs 20,000 crore Carbon Capture Utilization and Storage allocation over five years marks one of India’s largest industrial decarbonisation commitments.

Combined with customs exemptions for renewable manufacturing inputs and excise rationalisation for biogas-blended CNG, the Budget lowers the economic barrier to green transition rather than imposing new costs.

For heavy industry, compliance could become economically aligned rather than regulatory.

10. Litigation and Compliance Relief: Structural De-risking

Tax administration sees some of the most consequential changes:

• Assessment and penalty integrated into a common order

• Pre-deposit for appeals reduced from 20% to 10%

• No interest on penalty during first appeal stage

• Decriminalisation of several technical offences

• Maximum imprisonment reduced to two years (except repeat offences)

• Revised return deadline extended till 31 March

• Income Tax Act, 2025 effective from 1 April 2026

For corporate balance sheets, litigation exposure and compliance unpredictability have long been hidden risks. This recalibration addresses them directly.

The Larger Corporate Implication

Budget 2026 does not hinge on dramatic tax cuts or consumption stimulus. Instead, it adjusts structural levers:

• Capital expenditure sustained at scale

• Manufacturing deepened with defined outlays

• MSMEs capitalised

• Tax regime simplified

• Digital services incentivised

• Trade friction reduced

• Capital markets widened

• Energy transition funded

• Compliance risk lowered

The interventions are technical. Their cumulative effect, however, may be structural.

India Inc may not have explicitly demanded each of these changes. But across supply chains, tax planning, export operations, infrastructure contracts and digital services, the operating environment has been recalibrated.

Budget 2026, in that sense, is less about a headline announcement and more about ten interconnected shifts that quietly reshape how business gets done in India.

[The Economic Times]