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Finance Minister Nirmala Sitharaman’s Budget 2026–27 has offered industry-facing policy packages, offering relief, certainty and long-horizon incentives to corporate India at a time of global volatility. From tax clarity for IT services and capital markets to deep industrial policy bets on semiconductors, green technologies and manufacturing clusters to customs duty changes, the budget has a lot of proposals which will directly or indirectly imapct India Inc. The budget also nudges companies to align with long-term national priorities such as exports, climate transition, supply-chain resilience and scale. For India Inc, the message is this -- expand, formalise and compete globally.

Faster APAs: easing tax uncertainty for multinationals and large IT firms

The move to fast-track Advanced Pricing Agreements (APAs) to a two-year timeline—with a possible six-month extension—addresses one of the biggest irritants for multinational companies operating in India. Transfer pricing disputes have long created uncertainty around tax liabilities, especially for IT services, GCCs and R&D centres. Allowing modified returns for associated entities entering APAs further smoothens compliance. For India Inc, especially firms with overseas parents or subsidiaries, this means lower litigation risk, predictable cash flows and improved ease of doing business—an important signal as global capital becomes more selective.

One IT services bucket, bigger safe harbour: clarity and scale for tech companies

By clubbing IT services, IT-enabled services, KPO and contract R&D into a single category called “Information Technology Services,” the budget removes long-standing classification disputes. A uniform safe harbour margin of 15.5% and a sharp increase in the eligibility threshold from Rs 300 crore to Rs 2,000 crore significantly widens the net. This benefits not just global IT majors but also mid-sized Indian firms and GCCs that were earlier excluded. For India Inc, the impact is reduced compliance costs, fewer tax disputes and stronger incentives to move up the value chain into higher-end digital and R&D services.

Data centre tax holiday: foreign capital, domestic spillovers

he proposed long-term tax holiday till 2047 for foreign cloud companies serving global customers through Indian resellers is clearly aimed at attracting hyperscalers and large data-centre investments. While foreign firms are the primary beneficiaries, Indian companies stand to gain indirectly. Domestic IT services firms, system integrators, telecom players, real estate developers, power companies and equipment suppliers will see higher demand. Indian cloud resellers and SaaS firms could also plug into global platforms more deeply, strengthening India’s digital infrastructure and ecosystem.

Buyback tax as capital gains: a win for cash-rich IT majors

Treating buybacks as capital gains for minority shareholders is particularly positive for large IT services companies such as TCS, Infosys, HCL Tech and Wipro, which sit on large cash reserves. The change makes buybacks more tax-efficient and predictable, potentially increasing shareholder payouts. For India Inc more broadly, it improves capital allocation flexibility and aligns India’s tax treatment closer to global norms, making Indian equities more attractive to institutional investors.

CCUS push: helping heavy industry decarbonise without losing competitiveness

The ?20,000 crore allocation over five years for carbon capture, utilisation and storage (CCUS) marks a pragmatic shift in India’s climate strategy. For power, steel, refining and chemicals companies—especially capital-intensive players like Tata Steel and JSW Steel—this offers a viable pathway to reduce emissions while continuing operations. With carbon mitigation becoming a key ESG and trade requirement globally, CCUS support can help Indian firms meet tightening climate norms, protect export competitiveness and avoid abrupt disruptions to growth and energy security.

Total return swaps and FEMA review: deeper, more flexible capital markets

The proposal to introduce total return swaps on corporate bonds and review FEMA rules modernises India’s financial architecture. Total return swaps can improve liquidity and price discovery in the corporate bond market, lowering borrowing costs for companies. A more contemporary FEMA framework could ease foreign investment flows and structures. Together, these measures help India Inc access capital more efficiently, diversify funding sources and better manage risk.

Biopharma strategy: pushing firms up the innovation curve

The BioPharma Strategy for Health Advancement through Knowledge, Technology and Innovation signals a shift from volume-led pharmaceutical growth to innovation-driven expansion. For Indian pharma and biotech companies, this opens up opportunities in advanced research, biologics and contract innovation services. It also strengthens India’s positioning in global pharma supply chains, especially as companies look to diversify away from concentrated geographies.

ISM 2.0: expanding the semiconductor opportunity beyond fabs

India Semiconductor Mission 2.0 goes beyond fabrication to include equipment, materials, full-stack IP and supply chains. For Indian companies, this widens participation -- from electronics firms and design houses to materials, chemicals and precision engineering players. It also increases the chances of domestic firms embedding themselves in global semiconductor value chains, rather than remaining peripheral beneficiaries.

Rare earth corridors: Securing inputs for future industries

By supporting rare earth corridors in Odisha, Kerala, Andhra Pradesh and Tamil Nadu, the budget strengthens access to critical minerals needed for EVs, electronics, defence and renewable energy. Indian manufacturers gain from reduced import dependence and supply security, while mining and processing companies get a clearer policy runway to invest.

Rs 10,000 crore MSME growth fund: scaling the middle of India Inc

The dedicated MSME growth fund aims to create “champions” among small and mid-sized firms through equity, liquidity and professional support. For larger corporates, this helps build stronger supplier ecosystems. For export-oriented MSMEs, it provides the capital and capability to scale, meet global standards and leverage India’s expanding FTA network.

Textiles package: reviving a jobs-and-exports engine

The integrated textile programme -- spanning fibre self-reliance, cluster modernisation, handloom support and mega textile parks -- targets scale, productivity and competitiveness. For textile companies, this means better infrastructure, technology access and compliance capabilities, helping them regain export momentum in a highly competitive global market.

Chemical parks: Boosting downstream manufacturing

Three dedicated chemical parks will support scale, safety and compliance in a sector critical to pharmaceuticals, agrochemicals and specialty materials. For India Inc, this lowers entry barriers, improves logistics and strengthens downstream manufacturing linkages.

Legacy cluster rejuvenation: Unlocking stranded industrial capacity

Rejuvenating 200 legacy industrial clusters addresses a silent drag on manufacturing competitiveness. For companies operating in older clusters, this can mean better infrastructure, utilities and regulatory support, helping revive under-utilised assets.

Sports goods manufacturing: A niche export opportunity

Positioning India as a global hub for sports goods opens export opportunities for SMEs and mid-sized manufacturers, particularly as global brands diversify sourcing. It also aligns with employment generation in labour-intensive regions.

CIE manufacturing: Import substitution in heavy equipment

The scheme to enhance construction and infrastructure equipment manufacturing supports domestic production of high-value machinery. For Indian firms, this reduces import dependence and opens opportunities in both domestic infrastructure and exports.

Container manufacturing scheme: Strengthening logistics sovereignty

The Rs 10,000 crore container manufacturing scheme over five years supports logistics resilience. Indian steelmakers, fabricators and engineering firms stand to benefit, while exporters gain from reduced dependence on global container cycles.

Electronics components outlay raised to Rs 40,000 crore: deepening localisation

The higher outlay for electronic components manufacturing strengthens India’s electronics ecosystem beyond assembly. For private companies, it means stronger incentives to invest in components, improve margins and integrate into global electronics supply chains.

Corporate tax changes: Tough choices for old-regime companies

Making MAT a final tax at a lower 14% rate simplifies the system but removes the ability to set it off against future liabilities. Companies with large carry-forward MAT credits—typically old-economy, capital-intensive firms—face tough decisions. Shifting to the new regime allows set-offs but requires giving up exemptions, potentially raising net tax outgo. The changes push India Inc towards a cleaner, simpler tax architecture, but not without near-term pain for some.

Customs duty relief: Lowering costs in strategic sectors

Extending customs duty exemptions for nuclear power projects, exempting capital goods for critical mineral processing, excluding biogas-blended CNG from excise calculations, and removing duties on aircraft components and MRO inputs collectively lower costs in energy, clean tech, aviation and defence. For Indian companies, these measures improve project viability, encourage domestic manufacturing and support self-reliance in strategic sectors.

Sitharaman’s budget offers India Inc a mix of certainty, incentives and long-term vision -- asking companies to invest, scale and innovate, while promising policy stability in an increasingly uncertain global economy.