Listen to this article in summarized format
Loading...
××
Subscribe to
Unlock AI Briefing and Premium Content
Subscribe NowWhat's Included
- Exclusive Stories
- Daily ePaper Access
- Smart Market Tools
- Curated Investment Ideas
- Ad-lite Experience
Subscription
The budget places manufacturing at the core of India’s expenditure priorities with targeted allocations across strategic and industrial manufacturing sectors as the country eyes a quarter of its gross domestic product (GDP) to come from manufacturing, up from 16-17% now. However, the reform plans fell short of expectations amid the global uncertainty unleashed by US tariffs and policies.
Though India is one of the fastest growing major economies with gross domestic product growth expected at 7.4% in FY26 foreign investors have sold a record amount of Indian equities and the rupee has weakened sharply to all-time lows.
Scaling up manufacturing in seven strategic and frontier sectors including semiconductors, rare earths, electronics and textiles is the government’s first Kartavya as it aims to launch three dedicated Chemical Parks, which received a ₹600-crore allocation for the first time. The India Semiconductor Mission 2.0 was allocated Rs 1,000 crore, while the Electronics Components Manufacturing Scheme received Rs 1,500 crore. The production-linked incentive (PLI) scheme for white goods (ACs and LED lights) saw allocation rise more than threefold to Rs 1,004 crore from Rs 304 crore in the previous fiscal year. To develop India as a global biopharma manufacturing hub, Rs 10,000-crore Biopharma SHAKTI will build the ecosystem for domestic production of biologics and biosimilars.
“Keeping Atmanirbharta as a lodestar, we have built domestic manufacturing capacity, energy security, and reduced critical import dependencies,” finance minister Nirmala Sitharaman said, adding that these measures supported employment generation and sustained economic growth.
The second edition of the India Semiconductor Mission to produce equipment and materials, design a full stack Indian IP, and fortify supply chains and a higher outlay of Rs 40,000 crore for the Electronics Components Manufacturing Scheme, launched in April 2025, will continue with the momentum on these crucial products.
Similarly, schemes for container manufacturing, enhancement of construction and infrastructure equipment to promote production of capital goods, seaplane manufacturing and a dedicated initiative for sports goods highlight the focus.
“The budget simplifies the customs tariffs by rationalising exemptions and embedding effective rates, while extending targeted duty relief to strengthen domestic manufacturing and exports as well as allowing supplies from a SEZ to domestic tariff area at a concessional rate,” said Bipin Sapra, Partner, EY India. The budget also maintained allocations for industrial infrastructure and corridor-led manufacturing. It also reinforced support for micro, small, and medium enterprises (MSMEs).
Budget 2026 Live
Your 2-minute guide to becoming a Budget pro
Check what gets cheaper and costlier in Budget this year
How far has India come since the last money manual
Budget 2026 Highlights: Here's the fine print
Scaling up manufacturing in seven strategic and frontier sectors including semiconductors, rare earths, electronics and textiles is the government’s first Kartavya as it aims to launch three dedicated Chemical Parks, which received a ₹600-crore allocation for the first time. The India Semiconductor Mission 2.0 was allocated Rs 1,000 crore, while the Electronics Components Manufacturing Scheme received Rs 1,500 crore. The production-linked incentive (PLI) scheme for white goods (ACs and LED lights) saw allocation rise more than threefold to Rs 1,004 crore from Rs 304 crore in the previous fiscal year. To develop India as a global biopharma manufacturing hub, Rs 10,000-crore Biopharma SHAKTI will build the ecosystem for domestic production of biologics and biosimilars.
“Keeping Atmanirbharta as a lodestar, we have built domestic manufacturing capacity, energy security, and reduced critical import dependencies,” finance minister Nirmala Sitharaman said, adding that these measures supported employment generation and sustained economic growth.
The second edition of the India Semiconductor Mission to produce equipment and materials, design a full stack Indian IP, and fortify supply chains and a higher outlay of Rs 40,000 crore for the Electronics Components Manufacturing Scheme, launched in April 2025, will continue with the momentum on these crucial products.
Similarly, schemes for container manufacturing, enhancement of construction and infrastructure equipment to promote production of capital goods, seaplane manufacturing and a dedicated initiative for sports goods highlight the focus.
“The budget simplifies the customs tariffs by rationalising exemptions and embedding effective rates, while extending targeted duty relief to strengthen domestic manufacturing and exports as well as allowing supplies from a SEZ to domestic tariff area at a concessional rate,” said Bipin Sapra, Partner, EY India. The budget also maintained allocations for industrial infrastructure and corridor-led manufacturing. It also reinforced support for micro, small, and medium enterprises (MSMEs).
( Originally published on Feb 01, 2026 )
