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      KPMG in India's pre-budget survey 2026 report

      KPMG in India conducted an online survey to gauge industry sentiment and expectations across sectors.

      Download findings

      Webinar on India Union Budget 2026-27

      Join KPMG in India’s budget webinar day as our specialists break down key updates from the Union Budget 2026–27. First session will cover the tax and policy landscape, while the second will focus on compliance requirements for Foreign Portfolio Investors.

      2 February 2026 | 11:00 a.m. to 12:00 p.m. IST

      2 February 2026 | 02:00 p.m. IST

      Accelerate progress and strengthen India’s global competitiveness

      The India Union Budget 2026-27 is expected to be presented on 1 February 2026 as India’s economy is forecast to expand by 7–7.5 per cent, driven by resilient consumer spending, infrastructure upgrades, and ongoing policy initiatives. Corporate deal activity remains robust, with M&A volumes reaching USD 61.3 billion in H1 20251, and foreign investment inflow continues to rise. However, tax litigation remains a challenge, with over 540,000 pending appeals2, signaling the need for faster disposal of tax appeals and clarity and simplification in tax laws. Against this backdrop, several tax measures are expected to accelerate progress and strengthen India’s global competitiveness.

      The government is promoting fast-track mergers and demergers. However, the Income-tax Act, 2025 does not provide for tax neutrality to fast-track demergers, creating uncertainty for businesses. Granting tax-neutral status is expected to streamline restructuring, cut compliance burdens, and allow businesses to reorganise swiftly and unlock new growth opportunities.

      Another expectation is the rationalisation of holding period for slump sale transactions. While most assets qualify as long-term after 12 or 24 months, undertakings transferred through slump sale still require a 36-month holding period. Lowering this threshold to 24 months would align regulations and enhance the appeal of asset transfers and reallocating capital effectively.

      On the international tax front, MAT exemptions for foreign companies taxable in India under presumptive tax regimes (i.e., operation of ships, aircrafts, civil construction, oil exploration services) is available only if their income solely comprises of income from the said specified businesses. The current provision creates a challenge when incidental income is earned alongside business income, potentially exposing these foreign companies to MAT. A clear exemption would help improve India’s competitiveness for foreign companies engaged in these businesses in India.

      Similarly, removing ambiguity in the definition of Associated Enterprises would reduce compliance complexity and disputes in transfer pricing. Overlapping clauses and unclear thresholds often lead to litigation. A more objective and streamlined definition would simplify reporting and enhance certainty for multinational groups.

      Extending dividend tax exemption for IFSC investors is expected to make India’s financial ecosystem more competitive globally. While interest income from IFSC units is exempt, dividends to non-resident shareholders are taxed at 10 per cent. Removing this tax would attract long-term foreign capital and strengthen India’s position as a hub for wealth management and global investment funds.

      In addition, several GST‑related measures are expected to significantly improve cash flows, reduce disputes, and enhance ease of doing business. A key anticipated reform is the deletion of Section 13(8)(b) of the IGST Act, which would shift the place of supply for intermediary services from the supplier’s location to the recipient’s location. This change would align India’s GST framework with global tax principles, reduce litigation in cross‑border transactions, and provide much‑needed clarity for service exporters.

      Simplification is also expected in relation to post‑sale discounts through amendments to Section 15(3)(b) of the CGST Act. Removing the requirement for discounts to be pre‑agreed and linked to specific invoices would bring GST provisions closer to commercial realities, reduce procedural complexity, and ease compliance for businesses operating high‑volume or incentive‑based pricing models.

      Further, the proposed omission of Section 54(14) of the CGST Act, which currently prescribes a minimum threshold for export refund claims, would be a major relief for small and medium exporters. This measure would enable exporters using courier and postal channels to access GST refunds without value restrictions, directly improving liquidity and export competitiveness.

      Another impactful expectation is the introduction of provisional refunds for inverted duty structure cases by amending Section 54(6) of the CGST Act. Allowing risk‑based provisional sanction of refunds would speed up access to working capital, reduce prolonged refund delays, and place inverted duty refunds on par with zero‑rated supplies, offering timely relief to affected industries.

      One hopes that the direct and indirect tax changes in the upcoming budget will deliver a tax ecosystem that is simpler, predictable, and aligned with the best global practices. By reducing disputes, easing compliance, and improving cash flow efficiencies, the budget has the potential to unlock investment, support exporters and MSMEs, and reinforce India’s position as a preferred destination for global capital.

      [1] Indian M&A boom returns: $61.3 billion deals in H1 2025, highest since 2022, ABP Live, June 2025.

      [2] India’s Pending Income Tax Cases Top 539,000 in FY25, BW Businessworld, December 2025.

      This microsite is your consolidated resource for all Budget related information. Through this platform, KPMG in India’s partners and sector leaders will engage with you and share their views and insights on India Union Budget 2026-27.  

      Key expectations from the Union Budget 2026-27

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      Enhance standard deduction for salaried employees

      The Union Budget 2026 may consider an increase in the standard deduction for salaried employees to INR1 lakh (currently INR50,000 under the old tax regime and INR75,000 under the new tax regime) to help offset inflation and rising living costs

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      Clarify perquisite valuation for electric vehicles

      Currently the value of perquisite arising from use of motor car provided by the employer to an employee is determined based on the cubic capacity of engine. However, with the growing emphasis on ESG, many organisations are actively promoting adoption of electric vehicles (EVs) for their employees. Therefore, it is recommended to introduce clear guidelines for valuing perquisites associated with EVs and specify a separate valuation framework for such vehicles

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      Extend timelines for filing revised/belated returns

      For any Financial Year (FY) a revised/belated return can be filed by 31 December following the end of the FY. In many cases (especially in case of individuals with cross border investment and income) the tax returns in the home/host country are not finalised by then, which may lead to under-reporting and over-reporting of income. For example, a U.S. citizen files their 2024 and 2025 tax returns by 15 April 2025 and 15 April 2026 respectively. If they become an ordinary resident in India, they must report global income for part of both 2024 and 2025 in their FY 2024-25 return. With the deadline for a revised or belated return in India being 31 December 2025, it would be helpful to allow such individuals more time to file revised or belated returns

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      Housing loan interest in new tax regime under Section 202 of Income-tax Act, 2025, (corresponding to Section 115BAC of the Income-tax Act, 1961)

      Under the new tax regime, taxpayers cannot offset housing loan interest against salary income, including for self-occupied property. Considering the significant burden of home loan repayments and the goal of promoting home ownership, it is recommended that the Government allows such interest deduction on self-occupied property under the new tax regime

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      Minimum Alternate Tax exemption for foreign companies under presumptive tax regime

      Minimum Alternate Tax (MAT) exemptions for foreign companies taxable in India under presumptive tax regimes (i.e., operation of ships, aircrafts, civil construction, oil exploration services) is available only if their income solely comprises of income from the said specified businesses. The current provision creates a challenge when incidental income is earned alongside business income, potentially exposing these foreign companies to MAT. A clear exemption would help improve India’s competitiveness for foreign companies engaged in these businesses in India

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      Clarification on ‘liable to tax’ for Fiscally Transparent Entities

      Current definition of ‘liable to tax’ requires income-tax liability only on the taxpayer under the law of the home country. In several countries such as Germany, the U.K. and the U.S., the partnership firms and other form of entities are fiscally transparent. In such cases, tax liability of the entity is discharged by the members/shareholders who are resident of the same country. It is therefore, recommended that necessary amendments be made to clarify that a person should be regarded as ‘liable to tax’ in respect of an income where such income is taxed as income of any other person –such as its partners, shareholders, beneficiaries of a trust etc. – who are resident of the same country

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      Tax neutrality for fast-track demergers

      The government is promoting fast-track mergers and demergers. However, the Income-tax Act, 2025 does not provide for tax neutrality to fast-track demergers, creating uncertainty for businesses. Granting tax-neutral status would streamline restructuring, cut compliance burdens, and allow businesses to reorganise swiftly and unlock new growth opportunities

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      Rationalise holding period for slump sale

      While most assets qualify as long-term after 12 or 24 months, undertakings transferred through slump sale still require a 36-month holding period. Reducing this threshold to 24 months would align regulations and enhance the appeal of asset transfers and reallocating capital effectively

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      Tax treatment of redemption premium on debentures under Section 76 of Income-tax Act, 2025 (corresponding to Section 50AA of Income-tax Act, 1961)

      In certain cases, Courts have treated redemption premium on debentures as interest. Section 76 presumes Redemption Premium on Debentures to be short-term capital gains. This creates uncertainty for issuers and investors on the treatment of such income, impacting tax computations and withholding obligations. To avoid litigation on this aspect, redemption premium in the nature of interest should be excluded from the purview of this deeming provision under Section 76 of the Income-tax Act, 2025

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      Exemption from dividend taxation

      Currently, dividend paid to a non-resident shareholder by a unit in IFSC is taxable at a concessional tax rate of 10 per cent. However, it is pertinent to note that the income by way of interest payable by a unit in IFSC is exempt. The success of an IFSC depends upon it being on par with other International Financial Centres located in Dubai, Singapore, etc., where dividend is exempt from tax in the hands of the shareholders. Exemption from dividend taxation to the shareholders of IFSC unit would be at par with interest income and would bring IFSC GIFT City at par with other IFSCs located in Dubai/Singapore. Corresponding exemption should also be provided from withholding tax perspective

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      GAAR exemption to IFSC units

      To ensure certainty of tax incentives and promote IFSC as a global hub, explicit exemption from GAAR provisions should be granted to IFSC units. Since exemptions are already codified under the act and treaty benefits are unlikely, GAAR application creates unnecessary uncertainty. Similar to FPIs, IFSC units meeting prescribed substance criteria should be safeguarded through a clear carve out from GAAR

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      Exempt Category III Alternative Investment Fund (AIF) from indirect transfer provisions

      It is recommended to provide an explicit exemption to Category III AIFs from indirect transfer provisions under Section 9(1)(i), on the lines of the exemption already granted to FPIs and IFSC based CAT III AIFs. Category III AIFs are regulated, transparent vehicles with independent custodianship and no scope for valuation manipulation; however, the risk of indirect transfer exposure creates deterrence for offshore investors and adds unnecessary tax uncertainty. A statutory carve‑out would enhance investor confidence, reduce litigation, and support the government’s objective of promoting onshore fund management and deepening India’s capital markets

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      Remove ambiguity in the definition of ‘Associated Enterprises’ for the purposes of transfer pricing regulations

      The current definition of ‘Associated Enterprises’ (AEs) under the Income‑tax Act, 2025 creates ambiguity because different clauses use inconsistent standards to determine when two entities are considered associated. Some clauses treat entities as AEs merely on the basis of participation in capital, management, or control without prescribing any quantitative threshold, while other clauses introduce specific thresholds-such as shareholding with voting rights or the power to appoint directors or board members-to establish capital participation, management influence, or control. This inconsistency results in overlapping interpretations and uncertainty for taxpayers when identifying AEs and reporting international transactions. To ensure clarity, reduce unnecessary disputes, and streamline transfer pricing compliance, it is recommended that each clause defining an AE be objectively delineated, with explicit thresholds or criteria for capital, management, and control relationships, so that the scope of the AE definition is applied consistently and predictably

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      Revaluation of Safe Harbour Regulations

      The current Safe Harbour Regulations apply only to a limited set of sector‑specific transactions and require taxpayers to meet prescribed turnover or margin thresholds. To enhance their effectiveness and encourage broader adoption, it is recommended that the safe‑harbour rates be revisited, the turnover‑based eligibility criteria be removed or relaxed, and the regime be expanded to cover a wider range of industries and transaction types

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      Multi‑year arm’s length price determination

      With the introduction of multi‑year arm’s length price determination in Budget 2025, taxpayers would benefit from detailed and simplified implementation guidance. Clear rules on how multi‑year data is to be used in assessments would help ensure consistency, reduce disputes, and align domestic practice with global transfer‑pricing principles

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      Secondary adjustment

      The existing de‑minimis threshold of INR1 crore for triggering secondary adjustments is relatively low and often leads to compliance requirements for minor transfer‑pricing variations. Increasing the threshold to at least INR10 crore would meaningfully reduce administrative burden, particularly for taxpayers with small or routine adjustments

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      Filing of Form 3CEB

      In cases where non‑resident taxpayers are exempt from filing a return of income in India-despite having tax obligations under domestic law-an exemption from filing Form 3CEB should also be provided to avoid redundant compliance. Additionally, taxpayers should be permitted to file a revised Form 3CEB, similar to the ability to revise income‑tax returns, to correct bona fide errors or incorporate updated transfer‑pricing positions

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      Amendment to place of supply for Intermediary Services (Section 13(8)(b), IGST Act)

      The proposed deletion would shift the place of supply from the supplier’s location to the recipient’s location which shall align intermediary services with destination based taxation

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      Amendment to post sale discounts (Section 15(3)(b), CGST Act)

      The amendment is expected to remove the requirement that discounts must be pre-agreed and invoice linked. This shall allow more flexibility in offering post sale discounts and ease compliance

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      Provisional refunds for inverted duty structure (Section 54(6), CGST Act)

      The proposed change would allow provisional refund sanctioning for inverted duty structure cases. It shall also help to expedite refunds, improve liquidity, and reduce delays through a risk based approach

      The Economic Survey 2025-2026

      Yezdi Nagporewalla
      Yezdi Nagporewalla

      Chief Executive Officer

      KPMG in India

      The Economic Survey 2026 underscores India’s strong growth momentum, anchored in resilient domestic demand and a credible macroeconomic framework. With GDP growth estimated at 7.4% in FY26 and a stable outlook ahead, India remains among the world’s fastest-growing major economies.

      Progress on fiscal consolidation alongside sustained public infrastructure investment is encouraging. The continued reduction in the fiscal deficit reflects a clear focus on stability and quality expenditure, setting a constructive backdrop for the Union Budget. A continued emphasis on capex, productivity-enhancing reforms, and job creation will be key to sustaining momentum.

      Externally, the advancing India–EU free trade agreement offers an opportunity to boost competitiveness, exports, and employment. As India moves towards Viksit Bharat 2047, effective government–industry collaboration will be critical to delivering durable and inclusive growth.

      Mohit Bhasin
      Mohit Bhasin

      Global Head - Economic Growth, Government and Public Services

      KPMG in India

      Finance Minister Nirmala Sitharaman presented the Survey in Parliament today, setting the stage for Budget 2026 on Feb 1. As professionals working in the Economic Growth space, we view the Economic Survey 2026 is not just as a report card, but as a strategic blueprint for India’s next phase of development.

      The Economic Survey 2026 projects India’s GDP growth at 6.8-7.2% for FY26, driven by resilient domestic demand despite global uncertainties. The Survey emphasizes structural priorities such as infrastructure development, manufacturing expansion, and digital economy jobs, and recently signed Trade Agreement will act as a key driver of export competitiveness. On the fiscal front, the deficit is projected to narrow, supported by higher capital expenditure that can generate long-term productivity gains. At the same time, the Survey underscores the importance of human capital Investment through healthcare, education, and skill development, ensuring that growth remains inclusive and sustainable.

      The Survey paints a rather balanced roadmap: growth momentum anchored in domestic demand, fiscal prudence to maintain credibility, and social investment to ensure inclusivity. This sets the stage for Budget 2026 to translate these priorities into actionable policy measures.

      Naveen Aggarwal
      Naveen Aggarwal

      Office Managing Partner

      KPMG in India

      The Economic Survey 2025-2026 delivers a powerful message: while the global economy is fragmenting under geopolitical stress and supply-chain realignments, India is accelerating - and that divergence is our strategic advantage.. With 7.4% estimated GDP growth for FY26, low inflation, strong external buffers, and a disciplined fiscal path, India is showing that resilience and reform can move together, creating a stable and predictable macro environment for long-term capital.

      Driven by strong domestic demand, rising private investment, and a maturing manufacturing base alongside world-class services, India is increasingly emerging as a scalable, investable, and credible pillar of global growth, offering durability of returns and strategic relevance in an uncertain world.

      In a fragile global environment, India offers something rare: scale, stability, credibility, and a long-term horizon. As the world is becoming more uncertain, India is becoming more central - to growth and prosperity.

      Nilachal Mishra
      Nilachal Mishra

      Partner and Head, Government & Public Services (G&PS), National Leader - Government and Infrastructure

      KPMG in India

      With FY27 growth projected at 6.8-7.2 per cent and a calibrated fiscal consolidation path, the Economic Survey highlights a clear shift from intent to execution, where strong institutions, AI-enabled governance, and delivery at scale will define India’s next growth phase.

      KPMG in India leaders on Pre-Budget 2026-27

      Parizad Sirwalla
      Parizad Sirwalla

      Partner and National Head – Tax, Global Mobility Services

      KPMG in India

      • Since salaried taxpayers do not have any avenue to claim deduction for increased cost of living / other expenses (unlike a person earning business income), there is an ongoing expectation that the standard deduction is enhanced periodically keeping in mind the rate of inflation prevailing in the economy.

      • Despite the inevitable transitional challenges, the new Labour Codes mark a progressive and transformative shift-simplifying compliance, strengthening worker welfare, fostering inclusivity, and aligning India’s labour framework with global standards

      • As India prepares for Union Budget 2026, expectations around individual income tax remain high. After a year of significant reforms in 2025, the focus now is on consistency and ease of compliance.

        For individual taxpayers, the underlying expectation is simple: meaningful relief. Whether the Government will introduce adjustments to the new income tax regime remains to be seen. Key areas many are watching include:

        • Enhancement of the standard deduction
        • Allowing deduction of housing loan interest on self-occupied property under the new regime

        The upcoming Budget will signal how policy intent balances reform continuity with taxpayer relief.

      Abhishek Jain
      Abhishek Jain

      Partner and National Head, Indirect Tax

      KPMG in India

      • We anticipate deeper digitisation of customs processes, aligned with the GST framework. Following rate rationalisation and the shift of goods from the 12% slab to the 5% slab, many sectors face persistent input tax credit accumulation, as capital goods and services remain taxed at 18%. A Budget-led resolution would help resolve this challenge.

      • The focus of the Finance Minister on indirect taxes seems to be customs. Currently, we have about 8 tariff slabs. For an importer, multiple tariff slabs cause complications with respect to the classification, structure, and disputes related to the appropriate rate of customs duty. It is thus, expected, that these 8 slabs may be rationalised to about 4 customs duty slabs.

      • Amid global uncertainty and ongoing tariff wars, the industry is looking to Budget 2026 for stronger support for Make-in-India. Expectations include rationalisation of customs duties on key raw materials, simplification of duty slabs to reduce compliance friction, and a one-time window to resolve legacy disputes and litigation. Faster closure of related-party valuation approvals for importers, with maybe post-clearance risk-based audits instead of the current tedious process, is seen as a practical step towards improving ease of doing business and supply-chain efficiency.

      • A well-designed amnesty scheme for pending customs litigation could significantly reduce burden on courts and tribunals, unlock blocked revenue and provide certainty to businesses. If structured with reasonable settlement terms and clear eligibility, such a scheme can be a powerful tool for dispute resolution and improving ease of doing business

      • Union Budget 2026 will be announced in a landscape shaped by geopolitical uncertainty and US‑imposed tariffs, even as India continues to deliver strong GDP growth backed by strategic reforms. The Budget is expected to focus on growth, jobs and investment, while strengthening India’s competitiveness and economic resilience
        Key expectations:

        Make in Inda

        • Continued manufacturing‑led capex incentives
        • Strong push on employment generation

        GST

        • Roadmap to address accumulated credit in select sectors after rate rationalisation
        • Steps to unlock working capital caught in interpretational disputes

        Customs

        • Lower import duties on critical materials
        • Tariff rationalisation and deeper digitisation for smoother clearances
        • Amnesty‑style framework for resolving legacy disputes
      Himanshu Parekh
      Himanshu Parekh

      Partner and Head of Tax (West)

      KPMG in India

      • With over five lakh appeals involving nearly INR18 lakh crore pending at the Commissioner of Appeals level, introducing statutory timelines for disposal is critical. To curb fresh disputes, the Government could also consider a mediation or settlement mechanism for timely, amicable resolution.

      • With a view to provide a boost to fast-track demergers, it will greatly help the industry if the Government can allow tax neutrality in respect thereof. The industry also seeks clarity on tax neutrality in respect of transfer of investments by the demerged company to the resulting company where the demerged company is an investment holding company or is engaged in financial services business.

      Kalpesh Maroo
      Kalpesh Maroo

      Partner & National Head – Deal Advisory – M&A Tax, PE

      KPMG in India

      Budget 2026 presents an opportunity to boost India's strategic technology ambitions. Reforms in tax and regulations are crucial for attracting investment and facilitating cross-border deals. This will help India build capacity and capability in emerging sectors. The government aims to accelerate innovation and manufacturing. Strategic collaborations will be key to achieving the Viksit Bharat vision by 2047

      Gaurav Mehndiratta
      Gaurav Mehndiratta

      Partner and National Head, Corporate and International Tax

      KPMG in India

      For India to become a global defence industrial power, increased capital expenditure and a significant boost to defence R&D are crucial. Bold tax incentives will encourage private sector and startup involvement in defence production and exports.

      Rahul Kashikar
      Rahul Kashikar

      Partner, Head - Tax Technology and Transformation I Partner - Corporate International Tax

      KPMG in India

      India has moved ahead rapidly in tech-enabled tax compliance, creating an environment where processes feel more real time and seamless. As we look at 2026, three areas that can further strengthen this progress, improve TDS compliance, and ease the overall burden of administration:

      • Use AI to reduce tax litigation
        Intelligent systems can support faster case reviews, pattern identification, and early issue resolution. This can help reduce disputes and improve consistency.
      • Make the GST invoice management system mandatory
        The current system already supports higher accuracy and faster reconciliation. A mandatory rollout can help taxpayers and administrators work with cleaner data and fewer errors.
      • Rationalise TDS rates
        Simplified and more aligned rate structures can reduce mismatches, cut compliance workload, and support smoother reporting.

      India has built a strong foundation. Strengthening these three levers can help create a more predictable, efficient, and transparent tax ecosystem for everyone..

      Nitika Mehta
      Nitika Mehta

      Partner, Corporate Tax Technology

      KPMG in India

      As the new Income Tax Act takes effect from April, corporates want stability and certainty with no disruptive changes. To truly support corporate taxpayers, the government can use AI and technology to make compliance smoother and reduce manual effort.

      Key expectations include:

      • Pre-filled tax returns by integrating data across government systems using AI, reducing duplication and errors.
      • AI-driven automation to handle routine audits and speed up refund processing.
      • AI-powered chatbots that offer instant guidance on tax rules, timelines and filing steps.
      • Enhanced TDS returns and Form 26AS with richer, more connected data for easier reconciliation.
      Akhilesh Tuteja
      Akhilesh Tuteja

      Partner & National Leader, Clients and Markets

      KPMG in India

      • The most impactful step to make India an AI leader is scaling compute access nationwide. With 38,000 GPUs, the IndiaAI Mission has shown considerable progress. The next phase must expand this capacity dramatically and link it directly with skilling, research and industry adoption.

      • With AI and semiconductor missions underway, India stands at a crucial moment. Budget 2026 must lift R&D, deepen industry partnerships, and unlock capital for true innovation leadership.

      Naveen Aggarwal
      Naveen Aggarwal

      Office Managing Partner

      KPMG in India

      India has made real progress in raising manufacturing as a share of GDP, but our next leap depends on:

      • building strength in component manufacturing,
      • connecting last mile infrastructure, and
      • easing financing pressures on exporters.

      This is the moment for India to rethink what it will take to become a true global manufacturing hub and act with clarity and speed.

      S Sathish
      S Sathish

      Partner and National Sector Leader – Industrial Manufacturing

      KPMG in India

      India's manufacturing base stands at a critical inflection point. The upcoming Budget can help close digital gaps, fix high delivery costs, and drive AI powered productivity gains. Strong policy backing is essential to unlock true scale and push India toward meaningful global manufacturing leadership.

      Nilachal Mishra
      Nilachal Mishra

      Partner and Head, Government & Public Services (G&PS), National Leader - Government and Infrastructure

      KPMG in India

      • As India seeks to sustain 6.5-7% growth amid global slowdown risks, infrastructure provides a stable domestic anchor. It strengthens export competitiveness by lowering logistics and energy costs, supports long-term objectives such as manufacturing scale-up and the energy transition, and sends a clear signal of policy continuity to markets. For investors and businesses planning long-term capital commitments, that signal matters.

      • India's trade strategy is at a critical juncture, shifting from broad liberalisation to selective engagement. New trade pacts diversify markets, while domestic initiatives like PLI schemes build manufacturing strength. The upcoming Union Budget must focus on enhancing access, ensuring assurance in supply chains, and fostering agility to navigate global trade disruptions and secure India's competitive edge.

      • India's urban story has reached a decisive moment. With cities already contributing close to 60% of GDP and the urban population set to rise sharply, the real question is no longer whether urbanisation will drive growth, but whether policy can guide it wisely. As growth pressure moves beyond the largest metros, the Union Budget becomes more than a fiscal exercise. It becomes a signal of how deliberately India chooses to shape its cities, its workforce and its long‑term economic balance.

      Nikhil Sethi
      Nikhil Sethi

      National Leader Consumer Goods and Co-Lead Customer & Operations

      KPMG in India

      Budget 2026 can unlock FMCG momentum by strengthening consumer spending, easing input cost volatility, and simplifying compliance. Premiumisation and D2C are now core operating models, with digital and vernacular commerce extending reach efficiently. When paired with pragmatic sustainability, Make in India incentives, and resilient supply chains, FMCG becomes the clearest link between macro stability and everyday prosperity.

      Narayanan Ramaswamy
      Narayanan Ramaswamy

      National Leader - Education and Skill Development, Government and Public Services

      KPMG in India

      The human capital of India is shaped through our education and skilling institutions; Union Budget 2026 could provide the much-needed impetus for it. Research, innovation and asset creating should take centre stage in our higher education (HE) institutions. Funding for HE institutions – especially run by private sectors – new as well as expansion of existing institutions – need to have easier and cheaper access to funds. We should treat this an investment like in the case of Infrastructure.

      Neeraj Bansal
      Neeraj Bansal

      Co-Head and COO–India Global

      KPMG in India

      The year ahead will once again test how global trade adapts to uncertain and volatile changes. While challenges exist, the global economy will keep evolving, rewarding businesses and countries that stay flexible, watchful, and more aligned to long-term shifts. Resilience and not just growth will be a priority for India’s trade strategy. The upcoming budget presents a perfect platform to strengthen this approach. Building on the export promotion mission launched last year, the government can introduce more trade-related reforms this year, specifically targeting tariff-related solutions. Besides, India can expedite FTA negotiations with markets such as the U.S., the EU, and Mexico

      Waman Parkhi

      Partner, Indirect Tax
      KPMG in India

      • Providing clear policy support for strong hybrids by extending concessional GST rates or customs duty benefits, and rationalising duties on batteries, semiconductors, transmission kits and CKD kits for small cars - linked to localisation milestones - would help OEMs manage costs without undermining domestic manufacturing.

      • As the auto sector faces pressure from global tariffs, tech shifts and supply chain strain, Budget 2026 must focus on securing long-term demand and manufacturing resilience. The right policy moves can keep India’s mobility story on track:

        • Reinforce long-term demand in the automotive sector and prevent production or export hurdles linked to tariffs or supply chain constraints.
        • Introduce focused incentives for R&D across alternate fuel technologies, advanced automotive components, among other areas
        • Strengthen infrastructure and logistics support through dedicated programmes to ensure smoother domestic movement and global competitiveness
        • Boost rare earth processing capabilities India has the world’s third largest resource base but limited processing capacity, which limits our ability to build a self‑reliant EV and components ecosystem
        • Provide custom duty concessionsto build a stronger, resilient automobile value chain.

      Nirmal Nagda

      Partner, Tax Deal Advisory - M&A
      KPMG in India

      With Union Budget 2026 approaching, the infrastructure sector is calling for clear rules that speed up execution and improve capital flow.

      Expectations include National Infrastructure Pipeline (NIP) 2.0, a sharper focus on efficient capex through a Capital Expenditure Efficiency Framework, and long overdue clarity on FVCI participation in InvITs. These moves can unlock long term global capital and strengthen India’s growth path.

      Hear from the experts

      Sunil Badala in conversation with CNBC-TV18 on high expectations for cuts in both long term and short-term capital gains tax in the Union Budget 2026

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      Naveen Aggarwal in conversation with ET Digital on policy ideas that can help India scale its manufacturing strength and deepen its role in global supply chain

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      Abhishek Jain and Himanshu Parekh in conversation with CNBC-TV18 on tax litigation, TDS regime, ESOP taxation relief and more

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      The focus of the finance minister on indirect taxes seems to be customs. For an importer, multiple tariff slabs cause complications in classification, structure, and disputes related to the rate of customs duty

      Watch on PTI News

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      Sunil Badala
      Sunil Badala

      Partner, National Head of Tax

      KPMG in India

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