The Union Budget outlines a strategic push to position India as a global hub for Medical Value Tourism (MVT) and traditional medicine, particularly AYUSH.
Emphasis is placed on quality healthcare, research, employment generation, global competitiveness, and soft power diplomacy.
The approach integrates modern medical infrastructure with traditional healthcare systems.
Regional Medical Hubs for Medical Value Tourism
Government proposes to support States in establishing five Regional Medical Hubs in partnership with the private sector.
These hubs will function as integrated healthcare ecosystems, combining:
Medical treatment
Education and training
Research and innovation
Designed to enhance India’s appeal as a preferred destination for medical tourism, for both international and domestic patients.
Infrastructure & Services within Medical Hubs
Each hub will include:
AYUSH Centres for traditional and holistic healthcare
Medical Value Tourism Facilitation Centres to assist patients
Advanced facilities for:
Diagnostics
Post-treatment care
Rehabilitation
Focus on improving patient experience, continuity of care, and long-term recovery.
Employment & Human Resource Development
Medical hubs expected to generate diverse employment opportunities in the healthcare sector.
Increased demand for:
Doctors
Allied Health Professionals (AHPs)
Skilled support and technical staff
Supports workforce development aligned with global healthcare standards.
Global Momentum for AYUSH Systems
India’s leadership in traditional medicine highlighted as a key strength.
Yoga’s global recognition traced to its promotion at the United Nations.
Ayurveda’s resurgence noted, particularly in the post-COVID period.
Rising international demand for AYUSH products:
Benefits farmers cultivating medicinal plants
Creates opportunities for youth in processing and value addition
Key Budget Announcements for AYUSH
Three new All India Institutes of Ayurveda to be established:
Expansion of quality education
Enhanced clinical services
Strengthened research capacity
Upgradation of AYUSH pharmacies and Drug Testing Laboratories:
Improved quality assurance and certification
Better regulatory compliance
Availability of skilled technical manpower
Upgradation of WHO Global Traditional Medicine Centre, Jamnagar:
Strengthening evidence-based research
Enhanced training and capacity building
Greater global awareness and credibility of traditional medicine
Strategic Significance
Reinforces India’s commitment to evidence-based traditional medicine.
Strengthens India’s soft power and global health diplomacy.
Positions India as a trusted global destination for holistic healthcare.
Encourages public-private collaboration in healthcare infrastructure.
Aligns traditional knowledge systems with modern healthcare frameworks and global standards.
Highlights of Union Budget
Focus on Villages, Poor, Farmers, Youth and Women
Budget framed with a strong rural and social orientation.
Declining poverty levels attributed to ongoing welfare schemes.
Special emphasis on making the poor self-reliant, rather than dependent on subsidies.
Rural development seen as central to achieving national development goals.
Women Empowerment & Rural Entrepreneurship
Expansion of the ‘Lakhpati Didi’ scheme to strengthen rural women’s economic independence.
Introduction of ‘SHE-Mart’:
Community-owned retail outlets in every district.
Platform for selling products made by Self-Help Groups (SHGs) and rural women.
Facilitates market access, branding, and income diversification.
Encourages women engaged in:
Animal husbandry
Agriculture and allied activities
Traditional livelihoods to transition from subsistence work to entrepreneurship.
Increase in Rural Development Budget
21% increase in the Rural Development Ministry’s budget.
Combined budget of Rural Development + Agriculture ministries crosses ₹4.35 lakh crore, reflecting strong government commitment.
Signals prioritisation of villages and farmers in fiscal planning.
‘Viksit Bharat Gram G’ Scheme & MGNREGA
Over ₹1.51 lakh crore (including state contributions) allocated to the ‘Viksit Bharat Gram G’ scheme.
MGNREGA funding:
Earlier total allocation: ~₹86,000 crore.
Current Centre’s share alone increased to ₹95,692 crore.
With states’ share, total allocation exceeds ₹1.51 lakh crore.
Described as a historic and unprecedented investment in rural employment and infrastructure.
Strengthening Panchayati Raj Institutions
Under the 16th Finance Commission:
Over ₹55,900 crore to be transferred directly to panchayats.
Comparison with earlier period:
Earlier 5 years: ~₹2.36 lakh crore.
Current period: ~₹4.35 lakh crore (nearly double).
Direct funding enhances:
Local self-governance
Accountability
Village-level development planning
Agriculture Budget & Research Focus
Agriculture Ministry budget increased to ₹1,32,561 crore.
Allocation of ₹9,967 crore for agricultural education and research:
Major support to ICAR.
Focus on innovation, productivity and climate-resilient farming.
Fertiliser Subsidy & Cost Reduction for Farmers
₹1,70,944 crore provided as fertiliser subsidy.
Objective:
Ensure affordable fertilisers.
Reduce input costs.
Protect farmers from global price volatility.
Direct Income Support through Fibre, Medicinal & High-Value Crops
National Fibre Scheme:
Focus on silk, wool and jute.
Direct income support to farmers engaged in fibre production.
Support for medicinal plants:
Certification and export facilitation under the Ministry of AYUSH.
Enhances income for medicinal plant cultivators.
Promotion of high-value crops:
Coconut, cocoa, cashew and sandalwood.
Rejuvenation of old coconut plantations.
Expansion of new orchards.
Fruits, Vegetables & Market Access
Separate budgetary provisions for:
Increasing fruit and vegetable production.
Improving transportation and supply chains.
Ensures:
Better prices for farmers.
Easier access and affordability for consumers.
Reduced post-harvest losses.
Union Budget 2026–27 – Highlights
Overall Vision & Strategic Context
Union Budget 2026–27 places international trade and exports at the core of India’s growth strategy.
Anchored in macroeconomic stability, fiscal discipline, and sustained public investment.
Seeks to position India as a competitive, resilient, and globally integrated trading economy.
Recognises exports as key drivers of:
Employment generation
Industrial upgrading
Foreign exchange earnings
Integration into global value chains
Manufacturing-Led Export Competitiveness
Strong push to scale domestic manufacturing in strategic and labour-intensive sectors.
Objective: boost exports and reduce critical import dependence.
Key flagship initiatives include:
Biopharma SHAKTI
India Semiconductor Mission 2.0
Expansion of Electronics Components Manufacturing Scheme
Development of Rare Earth Corridors
Establishment of Chemical Parks
Targeted support for capital goods and container manufacturing
Focus on building resilient, high-value manufacturing ecosystems.
Support for Labour-Intensive Export Sectors
Renewed attention to traditional export sectors:
Textiles
Footwear
Sports goods
Handicrafts and handlooms
Measures include:
Integrated manufacturing parks
Modernisation and skilling initiatives
Cluster rejuvenation programmes
Sustainability-focused interventions
Revival of 200 legacy industrial clusters through infrastructure and technology upgradation to:
Lower costs
Improve productivity
Enhance global competitiveness of traditional export hubs
Gems & Jewellery Sector Reforms
Sector benefits from trade facilitation and logistics efficiency measures.
Removal of ₹10 lakh value cap on courier exports:
Supports small exporters and e-commerce-led shipments
Improved handling of returned consignments to reduce friction in B2C trade.
Extension of concessional customs duty regimes for:
Gold and silver dore bars
Lab-grown diamond inputs
Encourages domestic refining, value addition, and export competitiveness.
Services Exports: Policy Thrust & Global Ambition
Strong focus on making India a global services export leader.
Proposal for a High-Powered Education-to-Empowerment and Enterprise Standing Committee.
Aspirational target:
10% share in global services exports by 2047
Reforms for IT and IT-enabled services include:
Unified classification of IT services
Higher safe-harbour thresholds
Automated approvals
Faster Advance Pricing Agreements (APAs)
Long-term tax and regulatory certainty
Enhances India’s attractiveness for:
Global Capability Centres (GCCs)
International service providers
Digital Economy & Cloud Services
Proposal for tax holidays up to 2047 for foreign companies providing global cloud services via India-based data centres.
Introduction of safe-harbour norms for related-party services.
Expected outcomes:
Increased foreign investment
Expansion of digital infrastructure
Positioning India as a global hub for digital and data-driven services
Special Economic Zone (SEZ) Reforms
Reforms aimed at:
Improving capacity utilisation
Achieving economies of scale
Enhancing resilience of the SEZ ecosystem
Key measures:
One-time facilitation for limited Domestic Tariff Area (DTA) sales at concessional duties
Extended tax incentives for cloud and data-centre operations
Maintains strong export orientation while attracting global manufacturers and tech players.
Infrastructure Push to Reduce Trade Costs
Export strategy underpinned by large-scale infrastructure investment.
Focus areas include:
Higher public capital expenditure
Expansion of Dedicated Freight Corridors
Development of National Waterways
Promotion of coastal shipping
Logistics parks and container manufacturing
High-speed rail corridors
Benefits:
Reduced logistics costs
Lower dwell times
Improved connectivity for tier-2 and tier-3 cities
Enhanced supply-chain efficiency
Trade Facilitation & Ease of Doing Business
Shift towards a trust-based, technology-driven trade regime.
Key reforms include:
Electronic sealing of export cargo
Trusted supply-chain recognition
Automated customs processes
Expansion of non-intrusive scanning
Longer validity of advance rulings
Enhanced duty deferment for Authorised Economic Operators (AEOs)
Removal of value caps for courier exports
Outcomes:
Greater predictability
Lower transaction costs
Improved global trade facilitation rankings
MSME Support for Export Growth
MSMEs recognised as the backbone of India’s export ecosystem.
Key measures:
₹10,000 crore SME Growth Fund
Enhanced credit guarantee mechanisms
Mandatory use of TReDS by CPSEs
Integration of GeM with TReDS
Addresses:
Working capital constraints
Access to timely and affordable finance
Enables MSMEs to scale and compete globally.
Sector-Specific Export Opportunities
Targeted initiatives in:
Agriculture
Marine products
Pharmaceuticals
Tourism
AVGC (Animation, Visual Effects, Gaming & Comics)
Allied health services
Reinforces a diversified and resilient export basket.
Overall Assessment
Budget 2026–27 presents a coherent, forward-looking export strategy.
Integrates:
Manufacturing competitiveness
Services excellence
Infrastructure modernisation
Regulatory simplification
MSME empowerment
Strengthens India’s image as a reliable global trading partner.
Lays a strong foundation for:
Sustained export growth
Job creation
Long-term economic resilience
Union Budget 2026–27 – Highlights
Electronics Sector Initiatives
India Semiconductor Mission (ISM) 2.0 launched:
Objective: Produce equipment and materials, develop full-stack Indian IP, and strengthen semiconductor supply chains.
Focus on industry-led R&D and training centers to develop technology and skilled workforce.
Allocation of ₹1,000 crore for FY 2026–27.
Builds on the foundation of ISM 1.0, which already expanded India’s semiconductor capabilities.
Initially launched in April 2025 with an outlay of ₹7,22,919 crore.
Investment commitments already double the target.
Proposed increase in outlay to ₹40,000 crore to capitalize on growth momentum.
Information Technology (IT) Sector Measures
Unified Category for IT Services:
All software development, IT-enabled services (ITeS), knowledge process outsourcing, and contract R&D services to be classified under “Information Technology Services”.
Single safe harbour margin of 15.5% applied across all IT services.
Enhanced Safe Harbour Provisions:
Threshold for safe harbour raised from ₹300 crore to ₹2,000 crore.
Approval to be automated and rule-driven, eliminating the need for tax officer intervention.
Once applied, safe harbour can continue for 5 years continuously, at the company’s choice.
Advance Pricing Agreement (APA) Reforms:
Unilateral APA process for IT services to be fast-tracked.
Timeline: 2 years, extendable by 6 months at taxpayer’s request.
Modified return facility extended to associated entities of the company entering APA.
Data Centres & Cloud Services
Tax Holiday till 2047 for foreign companies providing global cloud services from India-based data centres, provided services to Indian customers are routed via an Indian reseller.
Safe harbour of 15% on cost proposed for data centre services by related entities.
Measures aim to boost investment, enable critical infrastructure, and position India as a global hub for cloud and data services.
High-Powered Services Sector Committee
Proposal to establish “Education to Employment and Enterprise” Standing Committee.
Mandate:
Recommend measures to position the Services Sector as a core driver of Viksit Bharat.
Assess impact of emerging technologies, including AI, on jobs and skill requirements.
Suggest interventions for workforce development and upskilling.
Strategic Implications
Reinforces India’s ambition to become a global hub for electronics, semiconductors, and IT services.
Promotes technology-led growth, innovation, and skill development in high-value sectors.
Enhances tax certainty and ease of doing business for IT and cloud companies.
Supports foreign investment and domestic capability building in cloud infrastructure and semiconductor manufacturing.
Aligns with long-term vision of Viksit Bharat, focusing on employment, enterprise, and technological leadership.
Highlights of Union Budget FY 2026–27
AI Data Centres & Digital Infrastructure
Data centres, especially AI data centres, identified as a critical infrastructure layer of AI architecture
Investment status:
USD 70 billion already under implementation
USD 90 billion worth of additional investments announced
Budget proposals:
Tax holiday till 2047 for foreign cloud service providers using India-based data centres to serve global customers
Indian customers to be served via Indian reseller entities
Safe harbour margin of 15% on cost for data centre services where the Indian provider is a related entity
Strategic impact:
Encourages long-term foreign investment
Positions India as a global hub for AI and cloud infrastructure
Provides policy visibility up to India’s centenary year (2047)
Long-Term Data Centre Policy Framework (till 2047)
Establishes a stable and predictable policy environment for cloud and AI infrastructure
Aims to attract hyperscalers and global technology firms
Strengthens India’s competitiveness against established global data centre destinations
India Semiconductor Mission (ISM) 2.0
Announcement of ISM 2.0, building on the success of ISM 1.0
ISM 1.0 credited with laying the foundation for a new semiconductor industry in India
Key focus areas under ISM 2.0:
Design and manufacturing of semiconductor equipment in India
Manufacturing of materials used in semiconductor production
Creation of a large semiconductor design ecosystem
Further strengthening talent development initiatives
Financial allocation:
₹1,000 crore earmarked for ISM 2.0 in FY 2026–27
Strategic significance:
Shifts focus from only fabrication to the entire semiconductor value chain
Reduces import dependence in critical semiconductor inputs
