We wanted to share post budget perspectives from industry experts
Subhakar Pappula, Founder & CEO, Flamingo Aerospace
“The Union Budget 2026–27 is a timely and decisive intervention for India’s civil aviation ecosystem. The exemption of basic customs duty on aviation components, parts, and raw materials directly addresses long-standing cost and supply-chain constraints that have limited scale, localisation, and global competitiveness. As highlighted by Hon’ble Union Finance Minister Nirmala Sitharaman, the proposed duty exemptions for components used in civilian training and other aircraft, as well as for raw materials supporting MRO requirements in the defence sector, will significantly strengthen domestic manufacturing and maintenance capabilities. These measures will accelerate aircraft manufacturing, expand MRO infrastructure, create skilled employment, and reinforce India’s emergence as a dependable regional aviation and aerospace hub. The Budget’s broader emphasis on capital investment, including customs duty exemptions on capital goods across key sectors, along with the proposal to institutionalise services-sector policy through a high-powered committee assessing the impact of AI on jobs, reflects a forward-looking approach to competitiveness and workforce readiness. Together, these steps strongly advance the objectives of Make in India and Atmanirbhar Bharat by enabling the aviation sector to build resilience, deepen value addition, and move up the global value chain.”
Vikash Sinha, Lead, Climate Change and Sustainability, MicroSave Consulting (MSC)
“The allocation of ₹1.4 lakh crore under the 16th Finance Commission is a commendable move that strengthens fiscal federalism. However, it must include dedicated provisions for locally led climate adaptation. Climate resilience cannot rely solely on broad infrastructure finance; adaptation requires public ownership with mechanisms that crowd in private sector innovation and investment.”
Simon Wiebusch, Country Divisional Head, Crop Science Division of Bayer in India, Bangladesh & Sri Lanka
“The Union Budget 2026 reinforces the shift towards high-value, climate-resilient agriculture anchored in productivity, technology and value chains. This aligns strongly with Bayer’s focus on science-based innovation, sustainable farming practices and integrated solutions that help small and marginal farmers build resilient and profitable farm systems.”
The Finance Bill 2026 introduces a new penalty regime under the Income‑tax Act, 2025 for failures in reporting crypto‑asset transactions including a daily penalty for non‑filing and a fixed penalty for inaccurate statements. While there was a reporting obligation introduced under the Income-tax Act, 1961, no similar VDA‑specific penalty existed therein, making it a significant compliance development. On the foreign asset disclosure scheme for small taxpayers, the Memorandum expressly mentions ESOPs, RSUs and similar foreign‑held assets, but does not specifically include virtual digital assets (VDAs). As a result, uncertainty continues on whether offshore‑held VDAs must be reported in Schedule FA and whether they qualify under the scheme. Further, the proposed GST amendment to the ‘place of supply rules’ for ‘intermediary services’ is particularly relevant for offshore crypto exchanges that operate on a marketplace model, as it detracts from the long-standing defence that mere facilitation of trades between users (without acting as counterparty) falls outside the Indian GST net on account of place of supply of intermediary services being outside India. Once effective, this amendment is expected to significantly weaken place-of-supply argument relied upon by offshore crypto platforms to contend that facilitation services to Indian users are not taxable in India.
Views on Climate
Union Budget 2026 signals that climate action is a key priority for hard to abate sectors. The proposed ₹20,000 crore outlay over five years to scale up carbon capture, utilisation and storage (CCUS) across power, steel, cement, refineries and chemicals is a meaningful step towards industrial decarbonisation. If implemented effectively, this can improve technology readiness and accelerate adoption in hard-to-abate sectors. From an ESG perspective, incentives for large-ticket municipal bond issuances are welcome, as they can unlock long-term capital for climate-resilient urban infrastructure. The launch of Bharat-VISTAAR also highlights the growing role of digital public infrastructure and AI in climate adaptation, particularly in agriculture, by enhancing productivity, improving risk management and strengthening farmer resilience. However, key gaps remain. The budget does not provide clarity on the tax treatment or exportability of carbon credits, both of which are critical for the scale-up of India’s emerging carbon markets. This was also a missed opportunity to extend concessional manufacturing tax rates, GST reliefs, R&D focused incentives and customs benefits across the cleantech ecosystem. Clearer tax signals and a more technology-neutral approach to cleantech incentives would significantly strengthen India’s climate and ESG framework.
Rajat Tandon, President, IVCA
“We congratulate the Hon’ble Finance Minister on presenting a forward-looking and futuristic Budget, which reinforces India’s position as a safe haven for long-term investments. The Budget underscores a sustained focus on execution-led growth, with clear momentum across infrastructure and MSMEs. Measures spanning sunrise sectors, including data centres, expand the opportunity landscape, particularly across infrastructure, research- and innovation-led sectors such as deep tech and defence, while also supporting employment generation across healthcare, manufacturing, sports and tourism. The emphasis on de-risking mechanisms like the Infrastructure Risk Guarantee Scheme, alongside support for semiconductors, textile and chemical parks, rare earth ecosystems and freight corridors, strengthens the foundation for private participation at scale. Initiatives such as the SME Growth Fund and steps to deepen TReDS further recognise the role of equity and market-based liquidity solutions in building resilient enterprises. As implementation gathers pace, sustained mobilisation of long-term domestic capital will be critical to anchoring India’s next phase of growth.”
Srini Sriniwasan, Managing Director, Kotak Alternate Asset Managers Limited, and Vice Chairperson, IVCA
“The continued emphasis on public capital expenditure, alongside the proposal to set up an Infrastructure Risk Guarantee Fund, signals a clear intent to de-risk project execution and crowd in private participation during the construction phase. Partial credit guarantees can play a meaningful role in improving risk allocation and financing confidence, particularly for long-gestation infrastructure assets. The measures announced to strengthen the corporate bond market further complement this direction by deepening market-based financing avenues. As India’s infrastructure pipeline expands, greater use of structured private capital—across equity and credit—will be important to complement public investment and support timely delivery at scale.”
Siddarth Pai, Founding Partner, 3one4 Capital & Co-Chair Regulatory Affairs Committee, IVCA
“Budget 2026 focused on removing artificial distortions in the law and making tax administration and taxation easier for taxpayers. A major win is the rationalization of buyback taxation. The previous buyback regime introduced in 2024 treated all gains from buybacks as dividend income, with the corresponding acquisition cost being treated as a capital loss. This distorted the true nature of buybacks and lead to a compliance burden for shareholders. The change to treat buyback income as capital gains is welcomed by all. However, the devil in the details lies in how promoters are treated during a buyback. The definition of a promoter is similar to SEBI and the Companies Act, 2013, but also includes shareholders holding more than 10% of the Company. Their buyback gains are taxed at 22% for corporates and at 30% for non-corporates. The focus on infra spending and the tax holiday for data centers until 2047 will help long term capital formation in this critical area. Furthermore, the emphasis on MSME funding through the mnew 10,000Cr Growth Fund and the top up of 2,000Cr for SRI Fund will help make out MSMEs competitive globally. The reduction of cost of capital is critical to growth.”
