Finance Minister Nirmala Sitharaman presented the Union Budget 2026-27 yesterday, delivering a disciplined yet forward-leaning fiscal roadmap that prioritises long-term competitiveness, digital economy acceleration, and enterprise resilience. With capital expenditure sustained at ₹12.2 lakh crore and the fiscal deficit targeted at 4.3% of GDP, the budget balances macroeconomic stability with targeted interventions in frontier manufacturing, creative skilling, data centre expansion, gems & jewellery efficiency, and MSME cash-flow relief.
Key highlights include the launch of India Semiconductor Mission 2.0 with a ₹40,000 crore outlay for electronics manufacturing, a tax holiday until 2047 for foreign cloud providers setting up data centres in India, establishment of AVGC Content Creator Labs in 15,000 schools and 500 colleges, a new Institute of Design in the eastern region, and a dedicated ₹10,000 crore fund for MSMEs backed by TReDS integration, credit guarantees, and mandatory platform usage for CPSE purchases.
Industry leaders have described the budget as balanced, execution-focused, and aligned with India’s ambition to become a global hub in semiconductors, digital infrastructure, and creative & consumer manufacturing.
Semiconductor Strategy: From Scale to Sustainable Excellence
The expansion of the Electronics Components Manufacturing Scheme and ISM 2.0 has been welcomed as a structural pivot toward energy-efficient, low-contamination, and decarbonised semiconductor facilities.
Deepak Pahwa, Chairman, Pahwa Group & Managing Director, Bry-Air, emphasised the sustainability imperative:
“Budget 2026 marks a structural shift in India’s semiconductor strategy by recognising that scale without sustainability is not globally competitive. With India Semiconductor Mission 2.0 and a proposed Rs 40,000 crore outlay for electronics manufacturing, the focus now moves beyond capacity creation to process excellence. Semiconductor plants are among the most energy and environment intensive manufacturing units, making energy efficiency, contamination control and decarbonisation non-negotiable. India’s real advantage will come from building fabs that are cleaner, more efficient and cost-competitive by design. This approach will determine whether India becomes a serious semiconductor manufacturing hub or merely an assembly destination.”
Digital Infrastructure: Tax Holiday Unlocks FDI and AI Readiness
The landmark tax holiday extension till 2047 for foreign cloud providers operating Indian data centres is seen as a game-changer for attracting hyperscale and AI workloads.
Mr. Bimal Khandelwal, CEO, STT GDC India, highlighted the strategic alignment:
“The Union Budget 2026 marks a decisive policy intervention that holistically addresses capital formation, demand creation, and long-term sustainability for India’s data centre sector. The proposed tax holiday till 2047 for foreign cloud providers using Indian data centres is expected to unlock increased foreign direct investment, position India as a preferred global digital infrastructure destination, and materially enhance its competitiveness in attracting hyperscale and AI-led workloads. This, in turn, will drive sustained demand for low latency, resilient digital infrastructure critical to enabling India’s Viksit Bharat 2047 digital economy agenda. We welcome the Government’s integrated approach, which aligns fiscal incentives with infrastructure readiness and sustainability priorities. At STT GDC India, we are well positioned to support this next phase of growth through scalable, AI-ready, and sustainable data centre infrastructure that underpins India’s digital future.”
Gems & Jewellery: Efficiency, Liquidity and Consumer-Friendly Reforms
The sector benefits from trust-based customs, faster clearances, uncapped courier exports, improved GST refunds, enhanced MSME financing, and eased traveller baggage/personal jewellery purchase rules.
Mr. Ghanshyam Dholakia, Founder & Managing Director, Hari Krishna Exports and KISNA Diamond & Gold Jewellery, described it as constructive:
“We view the Union Budget 2026–27 as a constructive and growth-oriented step for the gems and jewellery sector, with an emphasis on ease of doing business. The move toward trust-based customs, faster clearances, smoother bonded warehouse movements, removal of the cap on courier exports, and an improved GST refund framework will enhance supply-chain efficiency and unlock working capital across the value chain. Enhanced MSME financing backed by credit guarantees further strengthens liquidity for manufacturers and exporters. The balanced tax treatment of Sovereign Gold Bonds and physical gold also supports a fair and consumer-friendly market. The budget also eases the traveller baggage rules and personal buying of Jewellery. Overall, the Budget meaningfully advances competitiveness, compliance simplicity, and sustainable growth for the industry and end consumers.”
Creative Economy: Empowering the Next Generation of Talent
The rollout of AVGC Content Creator Labs and a new eastern Institute of Design has been lauded as a powerful validation for the creative and digital economy.
Khushboo Mulani, Founder and CEO, Slay Media, expressed enthusiasm:
“The Budget 2026 represents a significant advancement for me because I have a deep commitment to both creative work and technological development. The budget provides our brand and all creators and entrepreneurs with essential resources to pursue innovation while growing their businesses. The government’s commitment to establishing AVGC content creator labs in 15,000 schools and 500 colleges will empower future digital and creative talent. Additionally, the announcement of a new Institute of Design in the eastern region will provide specialized skills for the creative economy, shaping the next generation of designers. I believe this moment represents our best chance to succeed because it gives us numerous opportunities to explore.”
MSME Sector: Liquidity Relief and Growth Confidence
The ₹10,000 crore MSME fund, TReDS strengthening, GeM linkage, and credit guarantees for invoice discounting address chronic working-capital pain points.
Mr. Ashok Mittal, MD & CEO, BillMart Fintech, called it encouraging:
“Overall, this is a good and balanced Budget, with a clear focus on strengthening the MSME sector, which contributes nearly 30% to India’s GDP. The announcement of a dedicated ₹10,000-crore fund for MSMEs is a strong step and will support faster growth for small and medium enterprises. The measures proposed to strengthen the Trade Receivables Discounting System (TReDS) are equally encouraging, as they address long payment cycles that often stretch to 60–90 days for MSMEs. Mandating TReDS for CPSE purchases, linking GeM with TReDS, and introducing credit guarantees for invoice discounting will help improve cash-flow visibility and ease working-capital pressure. Together, these initiatives will give MSME entrepreneurs greater confidence to focus on scaling their businesses.”
The Union Budget 2026-27 charts a clear path: building sustainable, high-value manufacturing ecosystems (semiconductors), accelerating digital backbone growth (data centres), nurturing creative talent pipelines, streamlining traditional export sectors (gems & jewellery), and easing liquidity for MSMEs. With fiscal prudence intact, the budget’s success will now depend on swift implementation, regulatory clarity, and private-sector agility to convert these policy signals into broad-based investment, employment, and global competitiveness.
Last Updated on Wednesday, February 4, 2026 6:41 pm by Startup Chronicle Team
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