India’s Union Budget for 2026–27 reinforces the government’s focus on infrastructure expansion, manufacturing competitiveness and export-led growth, while maintaining a steady path of fiscal consolidation.
The fiscal deficit has been pegged at 4.3% of GDP for FY27, marginally lower than the 4.4% estimated for FY26, signalling the government’s intent to balance growth ambitions with macroeconomic stability. With real GDP growth projected between 6.8% and 7.2% in the coming financial year, India is expected to retain its position as the world’s fastest-growing major economy.
Aligned with the broader vision of “Viksit Bharat” and a renewed emphasis on “Yuva Shakti”, the budget outlines measures aimed at fostering inclusive and sustainable growth through capacity building across key sectors. Manufacturing features prominently, with policy support directed towards strategic and legacy industries, alongside continued efforts to strengthen micro, small and medium enterprises (MSMEs).
Infrastructure development remains a central pillar, with investments designed to catalyse demand across the economy. Although the budget makes limited direct references to real estate, industry experts say its focus on manufacturing, logistics and urban development could support growth across multiple asset classes, including industrial and warehousing spaces, data centres, retail, hospitality and, to a lesser extent, office markets.
A notable theme is the renewed push to unlock growth in Tier II and Tier III cities, including temple towns. Investments in tourism, skilling and high-speed connectivity are expected to stimulate regional development and create new economic hubs beyond the traditional metros.
The budget also signals targeted policy support for sectors likely to generate fresh real estate demand, such as textiles, healthcare, semiconductors and rare earths. Emerging areas, including artificial intelligence, feature prominently in the government’s long-term strategy.
One of the key announcements is the proposed tax holiday for foreign cloud service providers operating data centres in India. Analysts say the move could attract global hyperscalers, accelerate the development of digital infrastructure and deepen long-term investments. Over time, this could strengthen India’s position as a preferred destination for data centres and cloud-based services, reinforcing the country’s ambitions in the digital economy.
Overall, the budget reflects a calibrated approach, combining growth-oriented spending with fiscal discipline, while laying the groundwork for sustained economic expansion across regions and sectors.
