Ficci VP: Here are four budget imperatives for India to build a future-ready economy

From an industry perspective, expectations from the budget can be distilled into four high-impact priorities:

Build self-reliance: It should reinforce atmanirbharta by prioritizing strategic sectors where domestic capability is critical, not only for growth, but also for competitiveness and national security. The policy agenda must be anchored in a sector-specific, value-chain-driven manufacturing strategy that converts rising domestic consumption into local production and employment.

As India’s consumer market expands, the strategic imperative is clear: domestic demand must be met by globally competitive domestic manufacturing. This requires targeted support for key value chains, enabling firms to scale, innovate and integrate into global supply networks while reducing their vulnerability to external disruptions.

Manufacturing-led growth: Expanding manufacturing from around 17% of GDP to 25% is critical to boost employment. The sector’s growth has a high multiplier effect, generating direct factory jobs while supporting employment across logistics, small firms, services and regional supply chains. Large-scale ecosystems in electronics, renewable energy, defence, pharmaceuticals, auto components, food processing and chemicals can absorb India’s young workforce and support balanced development.

A fundamental mindset shift is required to place manufacturing on the same strategic pedestal as services. In a world where trade is getting weaponized, tariff support is now essential. India’s trade-support mechanisms must move faster and become more responsive to protect its SME backbone from unfair competition by manufacturing-led economies. This must be backed by sustained research-led investments across the value chain supported by the government.

The budget should enable firms to scale through a predictable tax regime, value-chain-aligned tariffs, faster trade facilitation, improved infrastructure and logistics, and access to long-term capital. This requires coordinated, whole-of-government action. If policy design, budgeting and execution move in tandem, manufacturing can become a powerful engine for job generation, competitiveness and economic resilience.

Create an enabling policy framework for business growth: Targeted interventions in taxation and trade facilitation can improve cost competitiveness, reduce uncertainty and reinforce India’s attractiveness for exports, services as well as high-value investment.

Litigation reduction is a big concern for investors. Addressing the pendency of income tax appeals is an opportunity for reform. Time-bound disposal of cases—particularly high-pitched assessments, matters with complete submissions, cases covered by settled jurisprudence and appeals pending for over five years—would ease liquidity pressures and restore confidence.

A dual-track system, combining fast-track resolution of simpler cases and detailed scrutiny of complex matters, supported by capacity augmentation, can cut litigation time.

Amid rising non-tariff barriers, exporters need policy support. The Remission of Duties and Taxes on Exported Products (RoDTEP) scheme is essential to neutralize embedded taxes. Its current scale remains inadequate. Enhancing its budgetary allocation and providing RoDTEP with long-term certainty would help offset structural cost disadvantages and support exports.

Next-generation reforms: Customs rationalization initiated last year should be carried forward through simplified tariff slabs, elimination of inverted duty structures and the alignment of tariffs to promote domestic value addition. Reforms must prioritize manufacturing scale, employment generation and supply-chain resilience.

The country’s tariff policy should be viewed as a strategic policy instrument rather than an ideological choice between protectionism and free trade. Concerns that higher tariffs inevitably fuel inflation are valid but often overstated. When tariffs catalyse investment, improve capacity utilization and generate jobs, income growth can outpace price increases, making moderate inflation economically and socially manageable.

Manufacturing expansion, supported by calibrated tariffs and reforms in land, labour, logistics and regulation, can generate large-scale employment and expand our tax base. While many levers rest with states, the Centre can play a catalytic role by linking 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 and encouraging prudent participation by insurance and retiral funds would improve access to long-term capital.

As India’s economy advances, the challenge is not merely to accelerate growth, but sustain it through greater productivity and competitiveness. The budget offers an opportunity to consolidate and strengthen the foundations of a future-ready economy.

The author is senior vice president, Ficci, and chairman, The Sanmar Group.