By Vinod Kumar, Partner and Leader - Manufacturing, PwC India

Union Budget 2026 reinforces an important transition already underway in Indian manufacturing—from policy intent to tangible capacity creation. The real question, however, is whether system-level enablers can now keep pace.

Manufacturing in India has long underperformed relative to its potential, constrained by structural, regulatory, and infrastructural bottlenecks. Although ‘Make in India’ articulated ambition, the outcomes of the same have been uneven.

Against this backdrop, the Budget’s focus on scaling select sectors, reviving legacy industrial clusters, and strengthening micro, small, and medium enterprises (MSMEs) is directionally sound. Targeted support for rare earth minerals, chemicals, textiles, and container manufacturing addresses competitiveness gaps where scale and input security matter the most.

The proposal to revive 200 legacy industrial clusters reflects a pragmatic recognition that productivity gains will increasingly come from better utilisation of the existing assets. MSMEs are repositioned as industrial enablers, supported by the ₹10,000 crore champion MSME fund and high-tech tool rooms that strengthen capital goods and supplier ecosystems. From a mining perspective, the sharper focus on critical and rare minerals acknowledges the growing importance of material security and processing capability.

India’s manufacturing journey is clearly moving from intent to capacity creation—the decisive test now is how effectively execution catches up.

SEZ – Gautam Khattar, Principal, Price Waterhouse & Co LLP

Please see below for SEZ related changes in the budget.

"Union Budget 2026–27 introduces a much-needed reform to enhance the competitiveness, flexibility, and integration of special economic zones (SEZs) with both global and domestic markets.

Introduction of a special, one-time measure permitting eligible SEZ manufacturing units to sell goods to the Domestic Tariff Area (DTA) at concessional duty rates addresses the problem of underutilisation of SEZ capacities due to global trade disruptions. The volume of such sales will be capped at a prescribed proportion of the unit’s exports, ensuring support for domestic industry as well as enhancing export competitiveness with regulatory changes planned to ensure a level playing field for DTA units."

Suresh Swamy, Partner, Price Waterhouse & Co LLP.

Given that FPIs execute trade through their Special Non-Resident Rupee (SNRR) accounts, it is important to seek a clarification affirming that payments made via these accounts will meet the prescribed payment condition under the IGST Act for export of services. This clarification will ensure certainty and facilitate the seamless application of the amended place of supply rules to FPIs that are transacting through various currency accounts.”

Sanjeev Krishan – Chairperson, PwC in India

“Amidst geopolitical concerns, fragmentation, and financial tightening across the globe, this year’s Union Budget lays emphasis on the collective strength of Bharat. From domestic manufacturing and infrastructure-led investments to targeted sector-specific reforms and expanding the workforce, these interventions reflect conscious choices—a clear effort to balance macroeconomic priorities with micro-level necessities. This is a Budget anchored in India’s potential and vision of becoming ‘Viksit Bharat’—boosting employment, while combining technologies of the future with India’s legacy industries. This is a push for resilience—to drive long-term, equitable, and sustainable growth backed by a ‘Kartavya’ approach.”

Arnab Basu, Chief Industries Officer, PwC India

“A Budget focused on reform and increasing speed of doing business.

Union Budget 2026 takes a deliberate sector-first approach, with manufacturing, technology, and pharmaceuticals positioned as core drivers of productivity, innovation, and global competitiveness.

In manufacturing, the Budget’s focus on scaling select sectors, reviving legacy industrial clusters, and strengthening MSMEs is directionally sound. Targeted support for rare earth minerals, chemicals, textiles, and container manufacturing addresses competitiveness gaps where scale and input security matter most.

For the technology sector, continued investments in digital public infrastructure, AI enablement, tax holiday for data centres, and advanced skills are likely to accelerate enterprise adoption, improve operational efficiency, and support the transition towards higher-value digital and engineering services. In health and pharmaceuticals, the impact could be equally structural. The focus on biomanufacturing, expanded care skills capacity, and regulatory strengthening—particularly faster and more predictable approval timelines—addresses long-standing execution bottlenecks. This is expected to reduce time-to-market, improve capital efficiency, and help Indian pharma companies move up the value chain into complex generics, biosimilars, and innovation-led offerings. Taken together, these measures improve ease of doing business while creating the conditions for scale. By aligning sectoral priorities with skills, regulatory reform, and innovation, the Budget supports sustainable growth across tech and pharma and meaningfully advances India’s Viksit Bharat ambitions.”

Navnit Nakra, Partner and Leader, Technology Sector, PwC India

Union Budget 2026 reinforces technology as a foundational enabler of India’s economic transformation. The continued focus on digital public infrastructure, AI, and emerging technologies—along with sustained investments in physical and digital connectivity—is expected to accelerate technology adoption across sectors and improve overall productivity and competitiveness. Investments in India’s digital infrastructure—spanning data platforms, cloud, connectivity, and cybersecurity—create the conditions for scale, interoperability, and innovation. For enterprises, this can translate into faster digital transformation, improved resilience, and the ability to build data- and AI-led operating models. For the technology industry, it offers new opportunities across engineering, platform modernisation, and next-generation digital services. Equally important is the emphasis on skills, ease of doing business, and regulatory clarity. Together, these measures help reduce execution friction, attract long-term capital, and strengthen India’s position as a trusted global technology and innovation hub—aligned with the broader ambition of Viksit Bharat.

Amit Rana, Partner, Price Waterhouse & Co LLP

Union Budget 2026–27 offers positive proposals for promoting investment in data centres in India. Under the proposals, income of overseas entities from the provision of cloud services using specified Indian data centres will be exempt from Indian income tax until 2047. Indian data centres will also be eligible for a safe harbour of cost plus 15%. These amendments with more than 20-year validity, will provide significant certainty to cloud service providers and allow them to plan large capex in India which could be beneficial forfor India to become a global data hub."

Dhruv Gadh, Partner, Transport & Logistics, Infrastructure & Resilience, PwC India

The Government’s dual emphasis on a robust budgetary outlay for the transport sector—to sustain the capital expenditure momentum alongside targeted reforms—demonstrates a clear commitment to lowering logistics costs and fostering efficient, resilient, and sustainable trade. These reforms range from customs digitisation and modal‑shift incentives through coastal‑cargo promotion to providing developmental support for the transport and logistics manufacturing ecosystem, including container production and ship‑repair schemes.

Dr Rana Mehta, Partner & Leader Healthcare, PwC India

Union Budget 2026 transforms healthcare from a social service into a strategic priority.

Announcements in clinical trials, Ayushman Bharat Digital Mission (ABDM), and the training of allied health professionals, alongside the ₹10,000 crore Biopharma SHAKTI investment, address India’s shifting disease burden towards non-communicable diseases (NCDs).

The training of 1 lakh allied health professionals and 1.5 lakh caregivers, alongside the establishment of three new All India Institutes of Ayurveda, reinforces a workforce that is technically skilled yet rooted in holistic wellness.

These initiatives act as the building blocks of a futuristic, accessible, and digitally enabled healthcare system.