SDG 8: Decent Work and Economic Growth | SDG 9: Industry, Innovation and Infrastructure | SDG 17: Partnerships for the Goals
Ministry of Finance | Ministry of Commerce and Industry | NITI Aayog
The FICCI Pre-Budget Survey 2026-27 reveals a strong wave of optimism within India Inc, with nearly 80 percent of industry respondents expressing confidence in the nation’s growth trajectory. Approximately half of the survey participants anticipate a GDP growth rate between 7 percent and 8 percent for the upcoming fiscal year. This optimistic outlook is grounded in India’s resilient medium-term fundamentals, even as the global landscape remains characterized by significant uncertainty.
Strategic Priorities for Manufacturing and Defense Industry sentiment identifies job creation, sustained infrastructure thrust, and robust export support as the top three macroeconomic priorities. There is a strong call for the government to maintain its focus on capital expenditure and the manufacturing sector. Specifically, the survey recommends the establishment of a mega electronics industrial cluster to co-locate original equipment manufacturers and component suppliers. In the defense sector, the industry suggests increasing the capital outlay share to 30 percent to modernize frontline assets, alongside significant funding boosts for Drone R&D and the Drone PLI scheme.
Trade Competitiveness and Tax Reforms Given rising global trade frictions and non-tariff barriers like CBAM, the industry seeks enhanced support for exports through the RoDTEP scheme and streamlined customs processes. A major recommendation is the rationalization of customs tariffs into three converged rate slabs to reduce compliance costs. On the direct tax front, the focus is on digitization, providing tax certainty, and improving litigation management. The survey underscores an expectation for a budget that balances aggressive growth imperatives with continued fiscal prudence.
What is the significance of “converging rate slabs” in customs tariff rationalization? Converging customs rate slabs refers to the process of reducing the numerous existing tariff levels into a few standardized categories (e.g., three levels). This simplification aims to eliminate classification disputes, reduce the administrative burden on both the government and importers, and provide much-needed tax certainty for businesses participating in global value chains. By creating a more predictable tariff structure, the government can lower compliance costs and enhance the overall competitiveness of Indian exports.
Policy Relevance
The FICCI survey results serve as a vital signal for the Ministry of Finance to align the Union Budget 2026-27 with industry-led growth drivers and global trade realities.
Global Supply Chain Integration: Establishing specialized clusters for electronics and defense will accelerate India’s transition into a high-tech manufacturing hub, reducing import dependency.
Fiscal Credibility: Industry’s confidence in the 4.4 percent fiscal deficit target for FY 2025-26 provides the government with the political capital to continue its consolidation roadmap without stifling growth.
Export Competitiveness: Rationalizing customs duties and enhancing RoDTEP allocations are critical defensive measures against global trade barriers and rising logistics bottlenecks.
Predictable Tax Regime: Focusing on digitization and dispute resolution in direct taxes will improve the “ease of doing business” and foster a more stable environment for long-term investments.
Relevant Question for Policy Stakeholders: What fiscal and structural policy choices would best align manufacturing-led job creation, export competitiveness, and tax certainty with India’s medium-term growth and fiscal consolidation objectives?
Follow the full news here: India Inc optimistic about India’s growth prospects ahead of Union Budget 2026-27: FICCI’s Pre-Budget Survey