Budget 2026: Industry Wants Policy Depth, Not Just Fiscal Signals

As India heads into Union Budget 2026, expectations from industry are notably restrained on headline giveaways and increasingly focused on structural enablers, policy frameworks that can sustain growth across technology, manufacturing, energy, and human capital.

Across conversations with founders, CEOs, and finance leaders, a common theme emerges: the next phase of growth will be decided less by scale alone and more by depth of innovation, resilience, and long-term value creation. Whether it is enterprise software, electronics manufacturing, climate intelligence, renewable energy, or workforce participation, industry voices are urging the government to move beyond transactional incentives toward ecosystem-level reforms.

Software And Enterprise Tech: Nudging India Toward Platform Ownership

For India’s software sector, Budget 2026 is being viewed as a moment to reinforce innovation sovereignty, particularly as enterprises deepen their reliance on AI-driven systems.

Sonali Chowdhry, CEO, OfficeNet, frames the opportunity squarely around R&D and workforce readiness:

“As India’s digital economy matures, Budget 2026 is a critical opportunity to strengthen the foundation for scalable, innovation-led growth. The software and technology sector would benefit from sharper R&D-linked incentives that encourage the development of homegrown AI and deep-tech solutions, particularly those that enhance enterprise productivity, compliance, and decision-making. Targeted R&D tax credits and structured innovation incentives can nudge companies to build and scale domestic platforms rather than rely on imported technologies.

Equally important is sustained government support for large-scale reskilling and talent development, ensuring the workforce remains future-ready as AI adoption accelerates across enterprises. Encouraging the adoption of foundational enterprise tools such as HRMS for core operational functions can help MSMEs and mid-sized organizations scale efficiently and compliantly. Together, these measures can accelerate digital adoption while positioning India as a global hub for sustainable, innovation-driven software growth.”

The emphasis here is not on consumption-led digitisation, but on enterprise-grade platforms built in India for Indian operating realities.

Electronics Manufacturing: From Assembly To Capability

In electronics and wearables, the conversation has decisively shifted from proving manufacturing viability to moving up the value chain.

Varun Gupta, co-founder of GOBOULT, points to how policy certainty has already altered industry behaviour:

“India’s audio and wearables industry sits at a critical intersection of electronics design and component manufacturing, and over the last few years, we’ve seen that intersection turn into a real production engine. With output growing 146% between FY21 and FY25, the PLI scheme didn’t just incentivise manufacturing, it restored confidence across the ecosystem.

What we’re witnessing now is a shift from assembly led growth to capability led manufacturing. PLI backed scale, combined with rising domestic demand, has attracted both global and Indian capital into electronics system design, tooling and supply chains. This is what’s allowing Indian manufacturers to compete globally, not on cost alone, but on quality, speed and reliability.

The next phase, however, will be decided by how deeply we invest in component manufacturing and R&D. Continued PLI support, targeted incentives for high value components and export linked benefits will be crucial in helping startups and manufacturers move up the value chain.

As we look to the upcoming Budget, extending PLI and strengthening export incentives can significantly reduce external supply dependencies and position India not just as a manufacturing base, but as a global hub for electronics innovation, building products in India, for the world”

The ask is clear: policy continuity paired with deeper technological capability, not just expanded capacity.

Capital, Talent, And Lifecycle Value In Electronics

From a financial and ecosystem lens, Subodh Garg, CFO, Cashify, highlights friction points that still constrain startups and talent:

“As India charts its path toward Viksit Bharat 2047, the Union Budget has an opportunity to shift the electronics sector from pure scale to sustainable value creation. Manufacturing momentum is now proven, but the next phase lies in strengthening capital formation, employee participation, and full-lifecycle value retention of electronics

From a startup and talent perspective, taxing ESOPs at the time of exercise continues to create friction, as employees are taxed on paper gains without any liquidity. Aligning ESOP taxation with actual monetisation would make ownership more meaningful and strengthen the ecosystem. Similarly, greater consistency in the treatment of long-term capital gains for unlisted shares would encourage longer holding periods and support patient capital as companies scale. At the same time, uncertainty around angel tax continues to weigh on early-stage funding, particularly where risk is highest

At an industry level, India’s electronics opportunity now extends beyond first-sale manufacturing. With electronics imports still significant, organised refurbishment and recommerce can become a practical import-substitution engine. Recognising certified second-life electronics within the formal value chain, aligning lifecycle taxation, and simplifying duties on components and spares would allow devices to generate value multiple times, not just once

The macro shift we would like to see is from import substitution to resource multiplication. If devices assembled in India are systematically repaired, upgraded, and recirculated, the country multiplies the return on every PLI and supply-chain investment. In that sense, the next Budget can help complete the journey from ‘Make in India’ to ‘Make it Last in India’, strengthening resilience and long-term economic value.”

This reflects a broader industry concern: policy must now account for lifecycle economics, not just first-sale metrics.

Renewable Energy: Scale Needs Execution Discipline

In clean energy, capacity addition alone is no longer the benchmark. Arif Aga, Director, SgurrEnergy, underscores the need for system-level readiness:

"As India progresses toward its 500GW renewable energy target by 2030, the Union Budget presents an important opportunity to strengthen the foundations for reliable large renewable deployment. Beyond capacity addition, focus must shift to grid readiness, storage integration, domestic manufacturing, and execution quality.

From an industry perspective, continued policy support for transmission infrastructure, including Green Energy Corridor, incentives and emerging technologies and support for FDRE and hybrid projects will be critical for system stability. Greater clarity on long-term market mechanisms for storage, along with streamlined approvals and faster execution timelines, would significantly improve project bankability and delivery certainty.

Equally important is sustained investment in data-driven planning, resource assessment, and independent technical oversight. These elements play a vital role in reducing project risk, improving performance outcomes, and attracting long-term capital into the sector.

A budget that balances scale with reliability and execution discipline will help India maintain momentum while building a power system that is both sustainable and robust over the long term."

The message: growth without grid resilience risks becoming fragile progress.

Childcare And Workforce Participation: The Missing Economic Lever

Beyond core tech sectors, industry leaders are also highlighting structural enablers of productivity. Swati Jain, Director, The Banyan, positions early childhood education as an economic imperative:

“As India approaches the Union Budget 2026, it is important to recognise that early childhood education and corporate childcare are not peripheral welfare measures, but core economic enablers. For millions of working parents, particularly women professionals, access to reliable, high-quality preschool and day care services directly determines their ability to enter, remain, and grow within the workforce.

India’s aspirations of higher labour force participation, improved productivity, and inclusive growth cannot be achieved without strengthening the childcare ecosystem. Corporate day care facilities and professionally run preschools ease the dual burden faced by working families, reduce career interruptions, and enable organisations to retain skilled talent.

We urge policymakers to consider targeted measures in the 2026 Budget such as enhanced tax incentives for employer-supported childcare, simplified compliance norms, and increased investment in early learning infrastructure. Supporting this sector will not only benefit working parents but also ensure better developmental outcomes for children during their most formative years.

A future-ready India must invest early in the systems that allow parents to participate fully in the economy. Strengthening early childhood education is, ultimately, an investment in India’s long-term human capital and global competitiveness.”

Climate Intelligence, AI, And MSMEs: Turning Data Into Capital

From the MSME and climate finance perspective, Impactree.ai’s leadership is calling for technology-led financial inclusion.

On behalf of Rajashri Sai, Founder & CEO, Impactree.ai:

"As India navigates the complexities of global supply chain shifts, the Union Budget 2026 presents a pivotal opportunity to redefine the competitive edge of our MSME sector. Now more than ever, it is imperative that the budget focuses on strengthening climate finance infrastructure specifically for small and medium enterprises.

The bridge to this transition is technology. We hope to see the government incentivize digital ecosystems that help MSMEs translate their sustainability performance into financial credibility…"

On behalf of Vivek Shankaranarayanan, Co-founder, Impactree.ai:

"While the progress India has made in building Digital Public Infrastructure and open data rails is commendable, the next frontier for the nation isn't just about expanding access; it is about building Systems Intelligence on top of these foundations…"

Together, these perspectives point toward AI as an economic multiplier, not a standalone tool.

Defence And Drone Tech: Design-First, Not Assembly-First

In strategic technology, drone manufacturers see Budget 2026 as pivotal. On behalf of Sai Pattabiram, Founder & MD, Zuppa:

"The Indian drone industry is emerging from a critical phase of disruption… With the right fiscal and policy backing, India has a real opportunity to evolve into a credible global alternative to the Chinese drone supply chain…"

And on behalf of Venkatesh Sai, Founder & Technical Director, Zuppa:

"From a technology standpoint, the Union Budget 2026 can be transformative for India’s cyber-physical and drone ecosystem by recognising secure computing, real-time AI, and indigenous hardware as national priorities…"

The Pre-Budget Throughline

Across sectors, the message to policymakers is consistent: the next budget must deepen capability, reduce friction, and reward long-term thinking. Industry is no longer asking whether India can scale, it is asking whether policy can now help India build systems that last.