Budget watch: FICCI survey signals strong industry confidence amid global uncertainty

Indian industry remains upbeat on India’s growth prospects ahead of the Union Budget for 2026-27, with nearly 80 per cent of respondents expressing confidence in the economy, according to a pre-Budget survey by the Federation of Indian Chambers of Commerce and Industry (FICCI).

The FICCI Pre-Budget Survey 2026-27, conducted ahead of the Budget presentation on February 1, captures industry sentiment and policy expectations at a time when global economic uncertainty, trade frictions and tariff-related challenges persist. Despite these headwinds, about half of the respondents expect India’s GDP growth to remain in the 7–8 per cent range in 2026-27, underscoring faith in the country’s medium-term fundamentals.

Confidence in fiscal management also remains strong, with around 42 per cent of respondents expecting the government to meet the fiscal deficit target of 4.4 per cent of GDP in 2025-26, reinforcing trust in the Centre’s fiscal consolidation roadmap.

The survey highlights job creation, sustained infrastructure spending and stronger support for exports as the three key macroeconomic priorities that industry wants the upcoming Budget to address. Sectors such as infrastructure, manufacturing, defence and MSMEs are expected to remain in focus, with respondents urging the government to continue prioritising capital expenditure and industrial expansion.

Industry has called for a sharper thrust on manufacturing, including the setting up of a mega electronics industrial cluster that brings together original equipment manufacturers, electronics manufacturing services firms and component suppliers to strengthen the domestic ecosystem. Defence manufacturing has also emerged as a critical area, with respondents recommending an increase in the capital outlay share of defence allocations to 30 per cent to modernise frontline assets, including unmanned aerial vehicles, counter-UAV systems, electronic warfare platforms and AI-enabled capabilities.

To accelerate the growth of the drone sector, the survey suggests enhancing the Production Linked Incentive outlay for drones to ₹1,000 crore and creating a ₹1,000 crore Drone Research and Development Fund.

Against the backdrop of rising global trade tensions, uncertainty over tariffs and non-tariff barriers such as carbon border adjustment mechanisms and deforestation-linked regulations, industry has underlined the need for stronger export support in the Union Budget. Respondents stressed the importance of streamlining trade facilitation and customs processes, reducing logistics and port-related bottlenecks, and strengthening export incentive and refund mechanisms.

The survey also recommends higher allocations under the Remission of Duties and Taxes on Exported Products scheme to improve export competitiveness, alongside reforms in special economic zone policies and further rationalisation of customs tariffs. Converging tariff slabs into three levels, respondents noted, would simplify the system, improve certainty and reduce compliance costs.

On the direct tax front, industry expectations centre on simplifying compliance through greater digitisation, ensuring tax certainty and improving dispute resolution and litigation management.

Overall, the FICCI Pre-Budget Survey 2026-27 reflects industry’s expectation that the forthcoming Union Budget will balance growth imperatives with fiscal prudence, while accelerating structural reforms to generate quality employment, enhance competitiveness and firmly integrate India into global value chains.

(With inputs from ANI & yMedia)