Corporate leaders share mixed views on Union Budget 2026, flag growth drivers and market risks

India Inc has broadly welcomed the Union Budget 2026, particularly its focus on infrastructure and logistics, while also cautioning against fiscal and market-side risks.

Girish Agrawal, Managing Director, said the proposed Surat–Dankuni Dedicated Freight Corridor could improve cargo movement between western and eastern India, reduce logistics costs and enhance market access for industries in Gujarat.

He also highlighted the government’s ₹12.2 lakh crore capital expenditure push in ports, shipping, coastal shipping and inland waterways, which could improve port efficiency.

Bond market concerns

A more cautious note was struck by Rajeev Radhakrishnan, CFA and CIO (Fixed Income) at SBI Mutual Fund, who said the government’s borrowing numbers and the lack of clear measures to support bond demand could keep yields elevated.

While long-term steps towards fiscal consolidation are positive, he said the bond market in the near term may remain dependent on the RBI’s open market operations. He also flagged continued uncertainty around interest rates as a potential challenge for markets.

Push to reduce dependence on China in strategic sectors

Divyam Mour, Research Analyst, SAMCO Securities, noted that the enhanced ₹40,000 crore allocation for Semiconductor Mission 2.0 could strengthen India’s chip design and manufacturing ecosystem over the long term.

He said the initiative could help reduce India’s dependence on China for key materials used in electronics, electric vehicles and defence manufacturing.

MSME credit flow and payment systems in focus

Prashant TS, Head of Mid-Corporates and Medium Enterprises Group at Axis Bank, said the expansion of credit guarantee coverage could encourage banks to lend more freely to MSMEs by reducing collateral requirements.

He added that increased adoption of the TReDS platform may help address delayed payments and improve cash flow management for small and medium enterprises.

Infrastructure spending may support premium auto demand

Santosh Iyer, MD and CEO of Mercedes-Benz India, said the additional ₹1 lakh crore capital expenditure allocation could improve highway infrastructure and inter-city connectivity, which typically supports demand in the luxury vehicle segment.

He also pointed to the fiscal deficit target of 4.3 per cent and the focus on exports as measures that could help maintain macroeconomic stability, while the proposal to allow a 30-day deferment of customs duty payments may ease corporate cash flows.