India eyes ‘global manufacturing powerhouse’ status with budget boost

India's new $630 billion budget aims to establish the country as a global manufacturing powerhouse. Announced by Finance Minister Nirmala Sitharaman, the budget includes allocations to boost key sectors like biopharma ($1 billion), container manufacturing, and semiconductor production. The budget, a 7.7% increase from last year, seeks to create jobs for India's large youth population and leverage free-trade agreements to increase exports. The government plans to scale up manufacturing in seven strategic sectors and establish chemical production parks to reduce import dependence. While analysts see the budget as addressing critical issues, they suggest further investment will be needed to diversify India's trade and secure new markets.

In February 2026, India's government, led by Prime Minister Modi, presented its annual budget for the 2026-2027 financial year, prioritizing infrastructure and domestic manufacturing amid global trade uncertainties. Finance Minister Nirmala Sitharaman unveiled the $583 billion budget, aiming to sustain economic growth despite challenges like US tariffs on Indian imports of Russian oil. The budget projects GDP growth between 6.8 and 7.2 percent, supported by a 12.2 trillion rupee investment in infrastructure. The government also intends to boost manufacturing in strategic sectors like pharmaceuticals and semiconductors, as well as invest in artificial intelligence. The budget seeks to offset the impact of trade disputes through new agreements, such as the one with the European Union.

India's Finance Minister presented the annual budget for 2026-27, prioritizing fiscal restraint and increased infrastructure spending to support domestic manufacturing amid global uncertainties. The budget, announced on Sunday, projects a slight slowdown in GDP growth due to increased tariffs. Key initiatives include record infrastructure spending, higher defense outlays, and a push for manufacturing in strategic sectors like semiconductors, data centers, and rare earths. Dedicated corridors for rare earth minerals will be established in Tamil Nadu, Kerala, Andhra Pradesh, and Odisha, supported by a previously approved 73bn-rupee scheme. A second semiconductor mission was launched with a $436m outlay, and a tax holiday is proposed until 2047 for foreign cloud companies investing in Indian data centers.