Union Budget 2026-27: Manufacturing Takes Centre Stage with ₹40,000 Crore Electronics Push

The Union Budget 2026-27 marks a transformative phase for India's manufacturing sector with strategic allocation of ₹40,000 crore for the Electronics Components Manufacturing Scheme, complementing the India Semiconductor Mission 2.0. The budget introduces seven high-priority manufacturing initiatives including Biopharma SHAKTI (₹10,000 crore) for domestic biologics production, three dedicated chemical parks, rare earth permanent magnet scheme, and integrated textile programme. Capital expenditure has been increased to ₹12.2 lakh crore for FY 2026-27. The policy framework includes customs duty concessions on capital goods for lithium-ion battery manufacturing, sector-specific duty exemptions for nuclear power and aircraft components, and a comprehensive scheme to revive 200 legacy industrial clusters. MSMEs receive enhanced support through increased allocation to SME Growth Fund and Self-Reliant India Fund. These measures aim to reduce import dependence, strengthen supply chains, and position India as a global manufacturing hub while creating millions of jobs across strategic sectors.