India’s Budget 2026 in focus as industry seeks stronger Make in India push

With the Union Budget 2026-27 just weeks away, industry has called for a stronger and more execution-focused push to the ‘Make in India’ initiative, flagging high compliance burden, rising logistics and energy costs, and limited access to long-term capital as major obstacles to scaling up domestic manufacturing.

According to a pre-Budget survey conducted by the Associated Chambers of Commerce and Industry of India (ASSOCHAM), a majority of respondents identified strengthening ‘Make in India’ as the top priority for the upcoming Budget.

The survey found that boosting domestic manufacturing is critical to sustaining India’s growth momentum, but businesses continue to face regulatory and cost-related headwinds that are hurting competitiveness.

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Respondents cited regulatory compliance burden as the biggest challenge, followed by global demand conditions and market access issues, availability of skilled manpower, high logistics and energy costs, and gaps in technology and automation. Challenges related to quality standards and certification requirements were also flagged.

To accelerate manufacturing growth, industry participants urged the government to focus on providing cheaper long-term capital, enhancing credit availability, and offering targeted tax incentives for technology upgrades, automation, and adoption of artificial intelligence.

Delayed payments and working capital shortages emerged as the most pressing pain points for MSMEs. Businesses called for cash-flow-based lending, green-channel credit linked to GST and e-invoice data, and incentives to promote timely payments.

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On the taxation front, a majority of respondents said that complex TDS and TCS provisions create significant cash flow and administrative pressures. More than half of the participants felt that the new Income Tax Act, 2025, would only partially achieve its objectives of simplification and certainty.

Industry also recommended expanding Production Linked Incentive (PLI) schemes to more sectors, rationalising customs duties on critical raw materials, and ensuring faster clearances at industrial parks, special economic zones, and industrial clusters.

Despite the challenges, sentiment remains cautiously optimistic. The survey found that 55 per cent of respondents are optimistic about the business outlook for the next 12 months, 32 per cent hold a neutral view, and only 13 per cent expressed pessimism.

The Union Budget 2026-27 will be presented on February 1, and industry is hoping for execution-driven reforms and targeted fiscal incentives to unlock private investment, strengthen MSMEs, and accelerate India’s manufacturing scale-up.