Budget 2026: FICCI Survey Flags Strong Growth and Jobs Outlook

As India stands at a crucial economic juncture—balancing domestic growth ambitions with an uncertain global environment—the mood within industry appears notably upbeat. With the Union Budget 2026–27 around the corner, Indian businesses are signalling confidence in the country’s economic direction, while also laying out clear expectations from policymakers. This sentiment comes through strongly in the latest Pre-Budget Survey 2026–27 released by Federation of Indian Chambers of Commerce and Industry (FICCI), which captures industry views on growth, employment, taxation and structural reforms.

Industry Confidence Remains Strong

At the heart of the survey is a strong vote of confidence in India’s growth story. Nearly 80 percent of respondents expressed optimism about the country’s economic trajectory, reflecting faith in India’s medium-term fundamentals even as global uncertainties—from geopolitical tensions to trade disruptions—continue to persist.

About half of the industry participants expect India’s GDP growth to stay within the robust 7–8 percent range in FY 2026–27. This outlook underscores a belief that domestic demand, public investment and policy continuity will continue to anchor growth. Equally important is the emphasis on fiscal discipline. Around 42 percent of respondents believe the government will meet its fiscal deficit target of 4.4 percent of GDP in FY 2025–26, reinforcing confidence in India’s fiscal consolidation roadmap.

Jobs, Infrastructure and Exports: Clear Budget Priorities

The survey identifies three clear macroeconomic priorities for the upcoming Budget: faster job creation, sustained infrastructure development, and stronger export support. These are seen not as isolated goals, but as interconnected pillars that can collectively drive inclusive and durable growth.

Infrastructure, manufacturing, defence and MSMEs emerged as key sectors where industry expects focused policy attention. These sectors are widely viewed as engines of both GDP expansion and employment generation—especially critical at a time when India is seeking to translate growth into large-scale, quality job creation.

Manufacturing Push and the Electronics Opportunity

Industry respondents stressed that continued momentum in manufacturing and capital expenditure will be essential to sustain growth and absorb India’s expanding workforce. One notable recommendation is the creation of a mega electronics industrial cluster. By co-locating original equipment manufacturers (OEMs), electronics manufacturing services (EMS) companies and component suppliers, such a cluster could significantly strengthen domestic value chains while generating large-scale employment.

This recommendation aligns with India’s broader ambition to become a global electronics manufacturing hub and reduce import dependence, while also offering new opportunities for startups and MSMEs across the electronics ecosystem.

Defence Manufacturing Takes Centre Stage

Defence manufacturing has been flagged as another high-potential sector for both GDP contribution and skilled job creation. The survey suggests increasing the share of capital outlay in defence allocations to 30 percent, aimed at modernising frontline capabilities such as unmanned aerial vehicles (UAVs), counter-UAV systems, electronic warfare platforms and AI-enabled defence technologies.

To further catalyse innovation, FICCI has recommended increasing the Production Linked Incentive (PLI) outlay for drones to ₹1,000 crore, along with the creation of a ₹1,000 crore Drone Research and Development Fund. These measures, industry believes, could spur exports, encourage deep-tech startups, and create high-quality jobs in a rapidly emerging sector.

Export Competitiveness Amid Global Headwinds

On the exports front, industry expectations are shaped by rising global trade frictions, tariff uncertainties and non-tariff barriers such as the Carbon Border Adjustment Mechanism (CBAM) and deforestation-related regulations. Against this backdrop, respondents have called for stronger policy support to help Indian exporters remain competitive.

Key recommendations include streamlining customs and trade facilitation processes, reducing logistics and port-related bottlenecks, and strengthening export incentive and refund mechanisms. Higher budgetary allocations under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme have been suggested to directly improve export competitiveness.

Industry is also looking for clarity on reforms to the Special Economic Zone (SEZ) policy and further rationalisation of customs tariffs. Converging customs duty slabs into three levels was proposed as a way to simplify the tax structure, reduce compliance costs and provide greater certainty to businesses.

Direct Tax Reforms and Ease of Doing Business

Direct tax reforms remain a key area of expectation. Industry respondents emphasised the need for simpler compliance through deeper digitisation, greater tax certainty, and improved dispute resolution and litigation management. A stable and predictable direct tax regime, they believe, will not only enhance ease of doing business but also encourage investment, accelerate growth and support formal job creation—particularly important for startups and scaling enterprises.

A Budget Balancing Growth and Prudence

Taken together, the FICCI Pre-Budget Survey 2026–27 paints a picture of cautious optimism. Industry is clearly looking to the forthcoming Union Budget to strike the right balance—supporting growth and job creation while staying committed to fiscal prudence. At the same time, there is a strong call for structural reforms that can strengthen India’s manufacturing base, boost exports, improve tax administration and deepen the country’s integration into global value chains.

For India’s startup ecosystem and broader business community, the message is clear: confidence is high, expectations are well-defined, and the Budget is seen as a critical opportunity to reinforce India’s long-term economic momentum.