As the Union Government prepares Budget 2026–27, industry leaders are calling for structural reforms that expand credit, simplify taxes, accelerate green transitions, and strengthen innovation ecosystems. From automobiles and pharma to lending, MSMEs, preventive health and insurance, the message is consistent: growth now depends on competitiveness, not just consumption.

Budget 2026–27 arrives at a strategic moment for India’s economy. Growth remains strong relative to global peers, yet private investment is uneven and global competition is intensifying in sectors such as electric mobility, AI-enabled healthcare, clean energy and R&D-driven pharmaceuticals. Industry executives argue that India’s next leap will require policy clarity, capital depth, tax simplification and sustainability-aligned incentives rather than piecemeal stimulus.

Several sectors also face structural crossroads. Automakers are balancing hybrid and EV pathways; health startups are preparing for AI-driven disruption; MSMEs are grappling with credit access and compliance; and insurers are seeking penetration and consumer trust. Leaders say the Budget can accelerate transitions that carry outsized economic and strategic impact.

Autos and Mobility: Hybrids, EVs and Fleet Modernisation

Automotive firms want Budget 2026–27 to offer clarity across hybrid and electric pathways while enabling faster fleet-led adoption. Vivek Datta, MD & CEO, Globe Toyota, JCBL Group, argues for a hybrid-inclusive approach.

“We seek a fiscal budget that enhances ease of doing business by minimizing government hurdles. Strong support for hybrids—practical and eco-friendly for India's emerging economy—through incentives, tax rebates, and simplified regulations will boost adoption, reduce emissions, and drive sustainable growth for dealerships like ours,” he says.

Consultants believe electrifying public transport could accelerate EV uptake. Subhabrata Sengupta, Partner, Avalon Consulting, notes: “There is discussion about extended PLI and EV subsidies, as well as EV infrastructure investment, with a focus on scrappage. I would welcome additional allocation on e-buses (fleet modernisation and electrification much needed) and incentives on R&D (where much of the Indian Auto Comp needs to move from build to print to tech ownership).”

The shift from assembly to intellectual property remains a defining ambition for the sector.

MSMEs and the Green Economy

MSMEs remain the backbone of India’s economic and export engine but face heavy compliance burdens and one of the world’s largest credit gaps. Industry leaders argue the Budget should integrate sustainability with competitiveness rather than treat green incentives as standalone subsidies.

“MSMEs account for ~30% of GDP, ~45% of exports, and over 20 Cr. jobs, yet face a credit gap exceeding ₹20 lakh crore. Advancing MSME credit access alongside green economy investments aligned with India’s SDG priorities can materially lift employment and export competitiveness,” says Neha Juneja, Founding Member, IndiaP2P & EquiRize.

She notes that renewables, green mobility and clean cooking represent “$50Bn+ in annual investment potential… strengthening medium to long-term resilience and meeting national green targets for 2030.”

Lending and Capital Markets: Unlocking Retail Pools

India’s credit ecosystem is maturing, but capital sourcing remains constrained for NBFCs and direct lenders. From a lending perspective, Juneja adds: “Measures such as rationalisation of TDS on listed NCDs and increased limits for RBI-regulated P2P lending will lead to flexibility and scale in capital sourcing for NBFCs and direct lending.” Unlocking domestic retail pools is increasingly seen as a competitive lever as deposit growth trails credit demand.

Health and Preventive Care: Competing With Global AI Platforms

Preventive healthcare founders see Budget 2026–27 as pivotal as AI begins reshaping health information markets and patient decision pathways. “Global AI platforms like ChatGPT Health will inevitably reshape consumer health information, but without policy support, they risk overwhelming homegrown players who understand India’s realities far better,” says Sudipta Sengupta, Founder & CEO, The Healthy Indian Project (THIP).

“Preventive health is not just a business opportunity; it is a national necessity. Incentives, grants and safeguards are needed to help Indian startups innovate responsibly, compete fairly, and build trusted health ecosystems,” she adds. The preventive health thesis aligns with India’s affordability constraints and disease burden, making early intervention a fiscal and public health priority.

Pharma: Duty Rationalisation and R&D Incentives

Pharma firms want the Budget to push India beyond its generic manufacturing leadership toward deeper research and resilient supply chains. Vigneshkumar Dhandapani, Associate Vice President, Avalon Consulting, outlines expectations: “Increase healthcare spend to 2.5% of GDP… correct inverted GST duty structures… widen PLI coverage to reduce >60% API dependence on China… and revive 200% weighted R&D deduction.”

The API dependence — which surged during COVID supply disruptions — remains a strategic vulnerability as global pharma diversifies away from China.

Insurance: Penetration, Trust and Consumer Protection

Insurance stakeholders argue that long-term growth rests on distribution and trust, not just tax breaks. “While GST exemptions have improved affordability and demand, long-term growth will depend on deeper structural reforms. Enhanced tax incentives, stronger micro-insurance frameworks, simplified distribution, and robust consumer protection are critical,” says Ankita Srivastava, GM – Growth & Strategy, THIP. With FDI liberalisation now in motion, the Budget will help determine penetration and innovation trajectories.

A Budget to Scale, Compete and Transition

India Inc’s wishlist reveals a Budget defined not by subsidy demands but by competitiveness, credit access, green transitions, innovation systems and consumer protection. The next leg of growth — whether in autos, pharma, health, fintech, MSMEs or sustainability — hinges on structural policy choices that expand scale and reduce friction for firms and households.

If Budget 2026–27 responds to these expectations, it could accelerate India’s shift toward an economy where capital depth, human capital, R&D, digital trust and green competitiveness matter as much as traditional consumption. For now, industry is watching to see whether the government treats this as a stimulation Budget — or a strategic Budget.

Industry Expectations Ahead of Budget 2026–27

What does India Inc want from Budget 2026–27?
Industry wants the Budget to unlock capital, improve MSME credit, support hybrids and EVs, incentivise preventive healthcare, deepen pharma R&D, strengthen insurance penetration, and align policy with sustainability and competitiveness.

Which sectors have the highest expectations this year?
Automotive, MSMEs, fintech lending, preventive health, pharma, insurance, and sustainability-linked industries have submitted the most detailed and structural asks.

Why is competitiveness a central theme this Budget?
Because growth is shifting from consumption to investment and innovation. India’s next phase requires R&D, green mobility, digital health, supply chain resilience and capital access — not just demand stimulus or tax relief.

What makes Budget 2026–27 different from recent years?
Industry sees this as a strategic Budget rather than a populist or stimulus-driven one. Global competition in EVs, pharma, AI health, credit and insurance is pushing for long-term reforms.

How are MSMEs positioned in this Budget cycle?
MSMEs face a ₹20 lakh crore credit gap and heavy compliance. Industry wants green credit lines, simpler taxation, and better access to alternative capital pools to improve exports and job creation.

What regulatory gaps does the industry want addressed?
Key gaps include ESOP taxation friction, inverted GST duties in pharma, EV charging infrastructure, insurance distribution barriers, and limited P2P lending limits for NBFCs.

What is at stake if reforms are delayed?
Delays risk slowing private investment cycles, stalling MSME exports, weakening innovation capacity, and missing green transition windows that competitors are already monetising.