Deloitte Calls for Stronger Trade Support in Upcoming Budget
Deloitte India has released its budget expectations for the financial year 2027. The firm urges the government to use this budget to strengthen India's trade resilience. They recommend expanding export credit and concessional financing for micro, small, and medium enterprises (MSMEs). Deloitte also suggests earmarking funds for exploration and overseas access to critical minerals.
MSMEs Need Financial Ease to Compete Globally
Deloitte highlights the central role of small enterprises in the economy. MSMEs account for about 46 percent of India's exports. They are the second-largest employer after agriculture. Easing financial and compliance pressures would help these firms navigate global volatility. It would help them sustain production and remain competitive in international markets.
Strengthening MSMEs will safeguard jobs and drive inclusive economic growth. It will boost rural incomes and support India's ambition to become a global manufacturing hub. Deloitte calls for simplified digital processes to reduce compliance burdens. They also recommend comprehensive training programmes to improve last-mile competitiveness.
The firm recommends targeted export incentives or enhanced duty drawback for tariff-sensitive sectors. These sectors include ready-made garments, gems and jewellery, and leather. They face heightened pressure amid shifting global trade rules.
Global Protectionism Adds Uncertainty for Exporters
Deloitte economist Rumki Majumdar points to rising global protectionism. She mentions ad-hoc measures like tariff hikes, rules-of-origin changes, and non-tariff barriers. These factors are adding uncertainty for Indian exporters. The direct impact of global trade frictions on GDP growth may be limited to 40–80 basis points. However, the spillover effects on MSMEs and employment could be significant.
MSMEs contribute 30.1 percent to GDP. They account for 45.79 percent of India's exports and employ nearly 290 million people. Disruptions in export markets or tightening trade rules pose serious risks to jobs and income stability, Majumdar warns.
Securing Critical Minerals for Resource Security
On resource security, Deloitte suggests creating a dedicated critical minerals fund. This fund would finance overseas acquisitions and technology collaborations. They also call for greater allocations for domestic exploration, extraction, and processing of minerals. Key minerals include lithium, cobalt, and rare earth magnets.
The firm advocates for deeper global collaboration with regions like Africa, Australia, and Latin America. This collaboration would secure upstream access and joint research and development in mineral processing and recycling.
Investing in Clean Energy for Long-Term Stability
In addition, Deloitte pushes for incentivising investments in renewable energy, green hydrogen, and grid-scale storage. They argue these measures would reduce external vulnerabilities. They would also support India's long-term transition to clean energy.
The budget expectations aim to build a more resilient trade framework. They focus on supporting key economic drivers like MSMEs and securing essential resources for future growth.
