The Union Budget 2025-26 outlines major allocations, economic reforms, and growth strategies, emphasising infrastructure, sustainability, digitalisation, and ease of doing business.
The Union Budget 2025-26, presented by Finance Minister Smt. Nirmala Sitharaman, introduces transformative reforms across multiple sectors, including maritime, aviation, EXIM trade, healthcare, manufacturing, and taxation. These strategic initiatives aim to propel India towards becoming a global economic powerhouse, reinforcing its industrial, trade, and logistics capabilities.
Maritime sector
A landmark ₹25,000 crore Maritime Development Fund (MDF) has been established to provide long-term financial support to India’s shipping sector. The government will contribute 49%, with major port authorities, financial institutions, and private investors funding the rest. The MDF will aid ship acquisition, aiming to increase Indian-flagged ships’ share in global cargo to 20% by 2047 and generate ₹1.5 lakh crore in investments by 2030.
To further boost domestic shipbuilding, the government has announced:
- Mega shipbuilding clusters of 1.0 to 1.2 million gross tonnage (GT) each, developed under Public-Private Partnership (PPP) to attract private investments and green technologies.
- Direct capital support for breakwater construction and capital dredging.
- A 10-year rent holiday on land allocation at nominal rates.
- ₹6,100 crore allocated for modernizing Indian shipyards.
- Revamped Shipbuilding Financial Assistance Policy (SBFAP) 2.0 with an outlay of ₹18,090 crore to provide subsidies to domestic shipbuilders.
- A shipbreaking credit note scheme offering a 40% credit note on scrap value to incentivize domestic scrapping and shipbuilding.
- Basic Customs Duty (BCD) exemption on shipbuilding and shipbreaking extended for 10 years.
- ₹2,850 crore allocated for maritime research, training, and skill development, aiming to generate 11 lakh jobs.
- Extension of the Tonnage Tax Scheme to inland vessels and expanded access to the PM Gati Shakti Portal for private players.
Union Minister Shri Sarbananda Sonowal hailed these initiatives as key drivers for achieving India’s vision of ‘Viksit Bharat 2047.’
Aviation sector
The government has revamped the UDAN scheme to expand regional connectivity to 120 new destinations, targeting 4 crore passengers over the next decade. Special focus areas include hilly regions, aspirational districts, and the Northeast.
Major air cargo infrastructure upgrades include:
- New warehousing facilities to streamline customs clearance for high-value perishable exports.
- Expansion of greenfield airports in Bihar and upgrading Patna Airport and Bihta Airport.
- The Western Koshi Canal ERM Project to support 50,000 hectares of farmland in Mithilanchal.
EXIM & Fisheries sector
To strengthen India’s seafood exports and reduce import costs for key raw materials, the budget has:
- Reduced BCD on frozen fish paste (Surimi) from 30% to 5% to support the imitation crab meat industry.
- Lowered import duty on fish hydrolysate from 15% to 5% to cut aquafeed production costs and boost shrimp farming.
- Launched deep-sea fishing initiatives in the Andaman & Nicobar and Lakshadweep Islands to tap into India’s 2.5 lakh tonnes of untapped marine fisheries potential.
- Increased the Kisan Credit Card (KCC) lending limit from ₹3 lakh to ₹5 lakh to enhance financial access for fishers and seafood exporters.
Healthcare
To make critical healthcare more affordable, the budget offers full customs duty exemption on 36 life-saving drugs, including those for cancer and rare diseases, along with a concessional 5% BCD on six additional medicines.
Other relief measures include:
- Expansion of the Patient Assistance Program to include 37 medicines and 13 new initiatives.
- Exemptions for 35 capital goods for EV battery production and 28 for mobile phone battery manufacturing.
- Full BCD exemption on critical minerals such as cobalt powder, lithium-ion battery scrap, lead, and zinc to promote local production.
Manufacturing & Trade
The budget rationalizes tariffs by eliminating seven customs duty rates on industrial goods, leaving only eight key rates, including ‘zero.’
Key trade facilitation measures include:
- Social Welfare Surcharge exemption on 82 tariff lines to simplify taxation.
- Extension of handicraft export timelines from six months to one year.
- Export duty exemption on crust leather and BCD waiver on wet blue leather to support small tanners.
- Revised BCD rate on knitted fabrics to enhance competitiveness.
- BCD cut on Carrier Grade Ethernet Switches from 20% to 10% to align with Non-Carrier Grade switches.
- Extension of Maintenance, Repair, and Overhaul (MRO) service timelines for railway goods to one year, aligning them with aircraft and ship repairs.
- New customs procedures allowing voluntary duty payment post-clearance without penalty to encourage compliance.
A vision for India’s economic transformation
The Budget 2025-26 sets a clear roadmap for strengthening India’s position as a global manufacturing hub, maritime powerhouse, and logistics leader. By fostering innovation, reducing trade barriers, and incentivising capital investment, the government is paving the way for robust economic growth and a competitive global presence. Let’s explore industry perspectives on the impact of the Union Budget 2025-26 on key sectors and future growth:
“The Union Budget 2025-26 lays a strong foundation for sustainable growth, balancing fiscal prudence with strategic investments across key industries. The logistics, air cargo, and supply chain sectors are set to benefit from targeted reforms aimed at enhancing efficiency, reducing costs, and driving digital transformation. Increased capital allocation for air cargo hubs in emerging industrial corridors will strengthen global connectivity, while the modernization of air cargo facilities with improved screening, customs efficiency, and cold chain solutions will enhance warehousing infrastructure. The establishment of five National Centres of Excellence will equip youth with skills for global supply chain opportunities under Make for India, Make for the World. Manufacturing and global supply chains will be further bolstered through sector-specific facilitation groups integrating industry and government.
The launch of BharatTradeNet (BTN) will streamline trade documentation and financing, complementing the Unified Logistics Interface Platform (ULIP) for seamless operations. Additionally, the ₹25,000 crore Maritime Development Fund aims to strengthen India’s global ocean trade, while the revamped UDAN scheme will connect 120 new destinations, expand helipad networks, and facilitate 4 crore passengers over the next decade. With strong collaboration between government and industry, these reforms will drive a new era of growth, ensuring India’s logistics and air cargo sectors remain globally competitive and future-ready.”
“Budget 2025 lays the groundwork for a significant transformation of India’s industrial and logistics landscape, offering extensive benefits for manufacturing, warehousing, and supply chains. The government’s initiatives are set to revolutionize industrial and logistics growth in India by introducing the digital public infrastructure platform BharatTradeNet. This will streamline trade documentation and financing, reducing bottlenecks in cross-border transactions. Upgrades to air cargo warehousing, particularly for high-value perishables, along with the ₹25,000 crore Maritime Development Fund for ports and shipping infrastructure, will further enhance India’s competitiveness in global trade. Technology-driven logistics solutions and multimodal connectivity investments will drive efficiency, sustainability, and resilience in the sector. These efforts create new growth opportunities for businesses to scale operations seamlessly.”
“The Union Budget reinforces India’s position as one the fastest-growing major economies, bolstering the road-map for overall growth in consumption and infrastructure. The ‘National Manufacturing Mission’ and ‘Make in India’ initiatives will further accelerate domestic production, fuelling ‘Move in India’ – a vision for seamless movement of cargo across the country. The sustained emphasis on infrastructure development, coupled with a three-year project pipeline under the PPP model and state-backed incentives for capital expenditure lay a strong foundation. The budget’s focus on logistics modernization, including PM Gati Shakti ; streamlined air cargo warehousing, and the new BharatTradeNet initiative will strengthen India’s logistics ecosystem. Aligned with this, we’re committed to leveraging technology, driving efficiency, and bolstering supply chain resilience. We look forward to collaboratively building a future-ready, sustainable, and tech-driven logistics landscape, aligned with India’s growth ambitions.”
“The transformation of India Post’s 1.5 lakh rural post offices, powered by a 2.4 lakh-strong workforce, is a game-changer for Bharat’s logistics and economy. This initiative will bridge the urban-rural divide, expanding financial, digital, and logistical access to tier 2 and 3 cities. Public-private partnerships and digitization will drive eCommerce growth, empowering local businesses and entrepreneurs. MSME-focused budget measures, including enhanced credit guarantees, higher classification thresholds, and ₹5 lakh-limit credit cards for micro-enterprises, reinforce this vision. With ₹91,000 crores committed to AIFs, these steps will foster entrepreneurship, job creation, and a self-reliant Bharat.”
“The Union Budget 2025-26 reaffirms the government’s commitment to infrastructure development, taking it to new heights. We welcome this focus, particularly on strengthening logistics through enhanced infrastructure, digital transformation, and supportive policies, which will be a game changer for India’s supply chain ecosystem. The introduction of the Bharat Trade Net Platform for seamless trade documentation and financing, along with the ₹25,000 crore Maritime Development Fund, are strategic moves that will drive efficiency, and boost global competitiveness. Maritime Development Fund will not only enhance India’s logistics and trade capabilities but also provide employment opportunities across diverse skill levels—from blue-collar workers to high-tech professionals—ensuring inclusive growth in the maritime economy. These transformative initiatives position India on the path to becoming a global logistics powerhouse.”
“The government’s decision to provide private players access to PM Gati Shakti data is a welcome move, enhancing collaboration and efficiency in infrastructure projects. This initiative is expected to accelerate growth, streamline goods movement, and strengthen logistics.
The establishment of an Export Promotion Mission to facilitate access to export credits and cross-border factoring is a commendable step, empowering MSMEs to expand globally. Additionally, the provision of easy-term loans up to ₹20 crore will significantly boost MSMEs, enabling them to scale operations and improve competitiveness.
The announcements aimed at fostering rural prosperity, enhancing resilience, and alleviating the tax burden on the middle class will stimulate consumption and drive long-term economic growth.”
“Modi 3.0’s vision for Viksit Bharat 2047 takes a strong step forward with the Union Budget 2025-26, driving holistic growth across key sectors. With PM Gati Shakti data now accessible to private players, logistics firms can optimize routes, cut fuel costs, and enhance efficiency with real-time insights. The ₹1.5 lakh crore infrastructure push through PPPs will accelerate growth in logistics, power, and transport. Tax reforms, including revised slabs and higher Sec 80C limits, will boost purchasing power, benefiting FMCG and its supply chain. This budget strengthens Make in India, digital transformation, and AI-led innovation.”
”The budget has laid the framework for long-term economic growth while fuelling all the key drivers – consumption, manufacturing, infrastructure, innovation, employment, private investment etc. At the same time, the government has demonstrated fiscal prudence by staying on the fiscal glide path. The personal tax reform will offer strong impetus to urban consumption, thus driving demand. The continued emphasis on infrastructure development will further enhance efficiency in the logistics operations – be it storage, transport and distribution. The focus on ease of doing business and regulatory reforms will further improve the investment climate and strengthen private investment in various sectors. The proposal to transform India Post into a large public logistics organization will boost the logistics capacity nationwide. The budget also reflects the government’s vision to turbocharge the development with new-age technology interventions through AI and deep tech innovation. All in all, the budget will act as a force-multiplier and will further strengthen macroeconomic stability while building resilience.”
“The Union Budget 2025 drives economic expansion with a strong focus on infrastructure, MSMEs, futuristic cities, and middle-class welfare, bringing substantial relief while stimulating rural consumption. For real estate, the budget acts as a growth catalyst, though the lack of major affordable housing announcements disappointed stakeholders. Key highlights include tax relief for the middle class, an INR 1 Lakh Crore Urban Challenge Fund to develop new-age cities, INR 15,000 Crore SWAMIH Fund for stalled residential projects, and fiscal support for MSMEs. The push for PM Gati Shakti data access, enhanced tourism infrastructure, and Global Capability Centres (GCCs) will further boost commercial and warehousing real estate. Despite gaps in affordable housing measures, the budget remains pro-growth, infrastructure-driven, and investment-focused, expected to drive real estate demand across key segments.”
“The Union Budget 2025 sets a progressive roadmap for India’s logistics and relocation industry, reinforcing its pivotal role in global trade. The establishment of the ₹25,000 crore Maritime Development Fund for long-term financing is a transformative step that will enhance shipping and warehousing infrastructure, fostering efficiency and global competitiveness. The Export Promotion Mission and BharatTradeNet (BTN) are commendable initiatives that will streamline trade documentation, improve financing solutions, and integrate MSMEs into global supply chains. Additionally, the focus on air cargo warehousing, particularly for high-value and perishable goods, aligns with the industry’s growing need for seamless and efficient logistics solutions.”
“The Union Budget 2025 highlights the government’s strong commitment to empowering MSMEs, crucial for India’s economic growth. The transformation of India Post into a major logistics player, alongside private sector contributions, will address the needs of MSMEs, women entrepreneurs, and self-help groups. With enhanced credit guarantees and higher investment limits, the budget supports MSMEs, unlocking innovation and job creation. Technological upgrades and customized credit cards for micro-enterprises will boost efficiency and competitiveness. The focus on reducing logistics costs, promoting green logistics, and advancing skill development positions India as a global trade hub. Overall, the budget strengthens the logistics and MSME ecosystem, fostering growth, inclusivity, and sustainability.”
“The Union Budget 2025-26 strengthens India’s defence and aerospace capabilities with a ₹4,91,732 crore allocation. The ₹20,000 crore for private sector-led R&D marks a pivotal moment, driving advancements in optronics, AI surveillance, defence electronics, and space technologies, key areas for Paras Defence.
The focus on geospatial intelligence, AI, and next-gen ISR systems signals a shift to high-tech defence solutions. The ‘Make in India’ initiative and reduced import reliance offer indigenous companies a chance to lead in electro-optics, aerospace, and EMP protection.
The ₹20,000 crore for R&D fosters deeper industry-academia collaboration, advancing high-precision surveillance, autonomous defence, and space-based intelligence solutions. With defence modernization underway, this budget creates a promising environment for industry-led innovations. At Paras Defence, we are eager to capitalize on these opportunities and drive India’s future in defence and space.”
“While the government’s commitment to strengthening domestic manufacturing capacity is a significant step towards making India a global supply chain leader, it is essential that we also focus on bridging the skill gap in the logistics sector. Investments in infrastructure, technology, and talent development, including AI-driven logistics solutions, will empower professionals to optimize supply chains. The establishment of the Rs 25,000 crore Maritime Development Fund is a vital initiative that will support the growth of India’s logistics and manufacturing sectors, positioning the country as a key player on the world stage.”
“The Union Budget 2025-26 reinforces India’s maritime ambitions with a ₹25,000 crore Maritime Development Fund, positioning the country as a global shipbuilding hub. The ₹1.5 trillion infrastructure allocation will enhance connectivity for shipyards and ports, supporting industry growth. However, policy reforms are needed to encourage private sector participation and reduce import dependence for critical components. A defined roadmap for defence shipbuilding, along with incentives for indigenous manufacturing, will further boost India’s self-reliance. Increased defence spending and modernization efforts present a strong opportunity for private players, making strategic partnerships essential for strengthening the naval defence ecosystem.”
Source: PIB Delhi, The Indian Express, LiveMint
