Manufacturing Sector Presents Wishlist Ahead of Budget 2026 Announcement
With Finance Minister Nirmala Sitharaman scheduled to present Budget 2026 tomorrow, India's manufacturing industry has articulated its comprehensive expectations from the central government. The sector's demands center around creating a more conducive environment for growth, innovation, and global competitiveness.
Primary Demands from Manufacturing Stakeholders
The manufacturing sector's priority list includes several critical areas requiring government attention. GST rate rationalization stands at the forefront, alongside input cost recalibration to address rising raw material expenses. Industry leaders are also seeking enhanced funding lines, comprehensive policy and incentive measures, continued infrastructure development, focused skill development initiatives, and further improvements in ease of doing business parameters.
Andre Eckholt, Managing Director at Hettich India for SAARC, Middle East & Africa regions, emphasized the budget's potential impact. "A supportive budget can accelerate local manufacturing and strengthen India's position as a reliable production hub for both domestic and export markets. The Make in India initiative, coupled with sustained policy support, can empower domestic manufacturers to scale up operations, foster innovation, and compete effectively on the global stage," he noted.
Economic Survey 2026 Sets the Stage
Tabled in Parliament on January 29, the Economic Survey 2026 provides crucial context for the upcoming budget. The document projects FY26 growth at 7.4% based on first advance estimates, while anticipating FY27 expansion in the 6.8-7.2% range, supported by strong macroeconomic fundamentals and ongoing regulatory reforms.
The survey specifically addresses manufacturing requirements, advocating for policies that increase domestic savings, enhance sector competitiveness, lower capital costs, and reduce dependence on foreign funding. It calls for measures supporting firm-level scale, deregulation, logistics improvement, infrastructure enhancement, trade facilitation, technological capability deepening, research and development strengthening, and sustained participation in global value chains to boost productivity and margins.
The document suggests that policy should focus on expanding exports by 2035 through structural changes in manufacturing rather than substantial spending increases.
Building on Budget 2025 Initiatives
Budget 2025 established significant foundations with the announcement of the National Manufacturing Mission covering small, medium, and large industries. This initiative aims to advance Make in India objectives through policy support, execution roadmaps, and governance frameworks across central ministries and states.
The mission focuses on five key areas: ease and cost of doing business; future-ready workforce development; vibrant MSME sector support; technology availability; and quality product enhancement. Additional measures included support for Clean Tech manufacturing to improve domestic value addition in solar PV cells, EV batteries, motors, controllers, electrolyzers, wind turbines, transmission equipment, and grid-scale batteries.
Other notable announcements included policy measures for labor-intensive sectors, a focus product scheme for footwear and leather sectors expected to generate employment for 22 lakh persons and turnover of ₹4 lakh crore, a National Action Plan for Toys, and establishment of a National Institute of Food Technology, Entrepreneurship and Management in Bihar to boost eastern region food processing.
Industry Voices Specific Expectations
Manufacturing leaders across sectors have detailed their Budget 2026 expectations:
- Nitin Jain, Joint MD of Concord Control Systems, emphasizes continued capital allocation for railway modernization, indigenous technology development, and next-generation propulsion systems, alongside incentives for domestic manufacturing of high-value electronics and clean mobility solutions.
- Hareesh Chandrasekar, CEO and Co-Founder of AGNIT Semiconductors, advocates for public procurement mandates favoring startups with over 50% indigenous content, GST rationalization for domestically designed and manufactured semiconductors, and eased GST on critical inputs for deep-tech startups.
- Ravalnath Shende, CMD of Shree Refrigerations, sees the budget as an opportunity to strengthen manufacturing ecosystems supporting defence, infrastructure, and core industrial sectors through balanced fiscal discipline and strategic investment.
- Deepak Pahwa, Chairman of Pahwa Group, calls for fiscal incentives promoting green industry, climate-resilient infrastructure investments, and policies prioritizing operational efficiency and resource optimization.
- Vinit Bediya, CMD of Silver Consumer Electricals, stresses policy stability through consistent PLI frameworks, customs duty rationalization on critical raw materials, and incentives for backward integration in solar PV modules, power electronics, and related technologies.
As the manufacturing sector awaits Budget 2026, the consensus centers on creating an enabling environment that addresses cost challenges, enhances competitiveness, and positions India as a global manufacturing powerhouse through strategic policy interventions and fiscal support.
