FICCI Leader Presents Four-Point Budget Blueprint for India's Economic Future
Vijay Sankar, Senior Vice President of the Federation of Indian Chambers of Commerce and Industry (FICCI), has outlined four essential priorities for India's upcoming Union Budget. The 2026-27 budget must serve as a strategic catalyst to maintain the country's growth trajectory. Sankar emphasizes that the budget should strengthen long-term competitiveness and shield the economy from external disruptions.
Strengthening Self-Reliance and Domestic Manufacturing
The first imperative focuses on building self-reliance. Sankar argues that the budget must reinforce atmanirbharta by prioritizing strategic sectors. These sectors require strong domestic capabilities for growth, competitiveness, and national security. A sector-specific, value-chain-driven manufacturing strategy is crucial. This strategy should convert rising domestic consumption into local production and employment opportunities.
India's expanding consumer market presents a clear strategic need. Domestic demand should be met by globally competitive domestic manufacturing. Targeted support for key value chains will enable firms to scale up, innovate, and integrate into global supply networks. This approach also reduces vulnerability to external disruptions.
Boosting Manufacturing-Led Growth and Employment
The second priority is accelerating manufacturing-led growth. Expanding manufacturing's share from around 17% to 25% of GDP is critical for job creation. The manufacturing sector has a high multiplier effect. It generates direct factory jobs while supporting employment in logistics, small firms, services, and regional supply chains.
Large-scale ecosystems in several industries can absorb India's young workforce. These include:
- Electronics
- Renewable energy
- Defence
- Pharmaceuticals
- Auto components
- Food processing
- Chemicals
A fundamental mindset shift is necessary. Manufacturing must be placed on the same strategic pedestal as services. In a world where trade is increasingly weaponized, tariff support becomes essential. India's trade-support mechanisms must become faster and more responsive. This will protect the SME backbone from unfair competition.
The budget should enable firms to scale through several measures:
- A predictable tax regime
- Value-chain-aligned tariffs
- Faster trade facilitation
- Improved infrastructure and logistics
- Access to long-term capital
Coordinated, whole-of-government action is required. If policy design, budgeting, and execution move together, manufacturing can become a powerful engine for job generation and economic resilience.
Creating an Enabling Policy Framework for Business
The third imperative involves creating an enabling policy framework for business growth. Targeted interventions in taxation and trade facilitation can improve cost competitiveness and reduce uncertainty. These measures will reinforce India's attractiveness for exports, services, and high-value investment.
Litigation reduction remains a significant concern for investors. Addressing the pendency of income tax appeals presents a major reform opportunity. Time-bound disposal of specific cases would ease liquidity pressures and restore confidence. A dual-track system could combine fast-track resolution of simpler cases with detailed scrutiny of complex matters.
Amid rising non-tariff barriers, exporters need robust policy support. The Remission of Duties and Taxes on Exported Products (RoDTEP) scheme is essential. It neutralizes embedded taxes. However, its current scale remains inadequate. Enhancing its budgetary allocation and providing long-term certainty would help offset structural cost disadvantages and support exports.
Implementing Next-Generation Reforms
The fourth priority calls for next-generation reforms. Customs rationalization initiated last year should continue. This involves simplified tariff slabs, elimination of inverted duty structures, and alignment of tariffs to promote domestic value addition. Reforms must prioritize manufacturing scale, employment generation, and supply-chain resilience.
India's tariff policy should be viewed as a strategic instrument. It should not be seen as an ideological choice between protectionism and free trade. Concerns about higher tariffs fueling inflation are valid but often overstated. When tariffs catalyze investment, improve capacity utilization, and generate jobs, income growth can outpace price increases.
Manufacturing expansion requires calibrated tariffs and reforms in several areas:
- Land
- Labour
- Logistics
- Regulation
While many levers rest with states, the Centre can play a catalytic role. It can link financial assistance and borrowing headroom to state-level progress on land and power reforms. Deepening the corporate bond market is essential to diversify financing options beyond bank credit. Expanding market access for mid-size and growth-stage firms would improve access to long-term capital.
As India's economy advances, the challenge extends beyond accelerating growth. The nation must sustain growth through greater productivity and competitiveness. The budget offers a crucial opportunity to consolidate and strengthen the foundations of a future-ready economy. Vijay Sankar serves as Senior Vice President of FICCI and Chairman of The Sanmar Group.
