India’s Union Budget 2026 has drawn strong support from legal and industry experts for its focus on tax certainty, infrastructure financing, AI, semiconductors, and energy security, while reinforcing a long-term, execution-led policy framework.
Union Budget 2026 marks a decisive shift toward long-horizon structural reform, with legal experts and industry leaders broadly welcoming its emphasis on tax certainty, infrastructure financing, manufacturing depth, and technology-led growth. Rather than headline-driven stimulus, the Budget reflects a calibrated attempt to de-risk India’s growth path while preserving fiscal discipline.
Tax certainty and dispute reduction take centre stage
A key theme emerging from expert commentary is the government’s intent to reduce litigation and improve taxpayer confidence.
Lokesh Shah, Partner at CMS INDUSLAW, noted:
“With an objective of easing taxpayer burden and minimising disputes, the Government proposes to merge assessment and penalty proceedings into a common order. Additionally, the mandatory pre-deposit requirement has been significantly reduced from 20% to 10%.”
On the IT and GCC front, Shah highlighted the significance of safe harbour reforms:
“In a significant and much-needed boost for the GCC and IT industry, the Budget proposes to consolidate IT, ITeS and software development services into a single safe harbour category with a uniform margin of 15.5%, while significantly raising the safe harbour turnover threshold from ₹300 crore to ₹2,000 crore.”
These changes are widely seen as reducing transfer pricing risk and compliance uncertainty for a sector central to India’s export economy.
Capital markets, buybacks and outward remittances
The restructuring of buyback taxation also drew attention. Shah observed:
“The proposal seeks to tax buy-back proceeds as capital gains in the hands of non-promoter shareholders… To avoid misuse or abuse of these provisions, the Government proposes that promoters will be subject to an additional buy-back tax.”
On outward remittances, he added:
“The Government’s decision to reduce the TCS rate on outward remittances under the LRS for medical treatment and education from 5% to 2% is a timely and well-calibrated relief…”
Legal experts see these measures as balancing equity, liquidity, and regulatory oversight.
Infrastructure, energy security, and industrial depth
Megha Arora, Partner at CMS INDUSLAW, highlighted the Budget’s infrastructure and energy focus:
“The Budget gives a strong thrust to the Indian infrastructure sector, by increasing the outlay to ₹12.2 lakh crore…”
She further noted the strategic importance of carbon capture, battery storage, nuclear power exemptions, and biogas incentives, concluding:
“Overall, Budget 2026–27 presents a forward-looking approach for the energy and infrastructure sector, in line with India’s Viksit Bharat vision.”
Shashi Mathews, also of CMS INDUSLAW, pointed to customs reforms aimed at boosting exports and domestic manufacturing, including relief for SEZ manufacturers affected by global trade disruptions.
Manufacturing, semiconductors, and rare-earth strategy
Industry leaders broadly welcomed the Budget’s manufacturing thrust. Vishal Gada, Founder & CEO of Aurtus, framed the Budget as a structural pivot:
“The Union Budget 2026-27 signals a strategic shift toward long-term structural reforms and high-value manufacturing…”
He highlighted tax holidays for cloud providers, electronics and semiconductor support, and rationalised penalties as central to improving ease of business.
Shreevardhan Sinha, Senior Partner at Desai & Diwanji, underscored the strategic importance of initiatives like Biopharma Shakti, rare-earth corridors, and Semiconductor Mission 2.0, noting that resilience is built “across the stack, not at a single node.”
Infrastructure risk mitigation and capital mobilisation
Infrastructure financing emerged as a standout reform area.
Satyadarshi Kunal, Partner at Saraf and Partners, described the Infrastructure Risk Guarantee Fund as:
“The ‘missing middle’ of project finance… providing the floor that pension and insurance funds need to finally take an interest in long-gestation infrastructure debt.”
Abir Lal Dey elaborated on its systemic impact, stating:
“This fund represents a transformative instrument for mitigating systemic bottlenecks… paramount to realizing Vision 2030.”
A Budget built for durability
Across legal, financial, and industry perspectives, Budget 2026 is viewed as an inflection point toward maturity — favouring predictability over populism and resilience over short-term growth.
Its success, experts caution, will now hinge on execution, regulatory clarity, and institutional follow-through.
