Budget 2025: Manufacturing sector urges pro-local policies, GST cuts, and tax reforms ahead of union budget

As the Union Budget 2025-26 approaches, leaders from India's manufacturing sector are urging the government to implement policies that support local manufacturing, reduce GST on consumer durables, and introduce tax reforms to boost disposable income and consumer spending. With the government's goal of increasing manufacturing's share of GDP from 17% to 25%, industry players are hoping for financial incentives, support for sustainable manufacturing, and expanded production-linked incentive (PLI) schemes.

Local manufacturing and GST reductions
Industry leaders are calling for policies that enhance local manufacturing capabilities. Simarpreet Singh, CEO of Hartek Group, praised the Indian government's strides in renewable energy, particularly solar power, and highlighted the importance of continued support for PLI schemes and infrastructure development. Reducing GST on consumer durables is seen as a crucial step to make local products more competitive and affordable.

Sustainable manufacturing and green technologies
Nileshkumar Kukalyekar, Business Director at Envalior, emphasised the need for greater investment in sustainable manufacturing and innovation. He urged the government to incentivize the use of recycled and bio-based materials, support research into new green technologies, and promote circular economy models. Enhancing such initiatives would accelerate India's transition to a low-carbon economy.

Technological advancements and tax reforms
Ankit Kumar, CEO of Skye Air, voiced strong support for the development of the drone sector. He suggested that the upcoming budget should prioritise tax exemptions or reduced GST rates on drone services, manufacturing, and maintenance to lower operational costs and make drones more accessible to businesses. Additionally, industry players are advocating for tax reforms that would provide more flexibility and support for companies operating in Special Economic Zones (SEZs).

Balancing technological advancements and foundational needs
Saurabh Rai, CEO of Arahas Technologies, highlighted the need to balance rapid technological advancements, particularly in AI, with the foundational needs of sectors like Geographic Information Systems (GIS) and space tech. Rai stressed the importance of boosting funding for GIS projects, which are essential for disaster preparedness, land optimisation, and sustainable urban planning.

As the Union Budget 2025-26 unfolds, the manufacturing sector's demands reflect a pressing need for supportive policies that foster innovation, investment, and growth in local manufacturing.

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