What's Happening?
The Union Budget 2026-27, presented by Finance Minister Nirmala Sitharaman, emphasizes strengthening India's manufacturing sector, particularly in electronics. The budget increases the outlay for the electronics components manufacturing scheme from ₹23,000 crore to ₹40,000 crore, aiming to build resilient supply chains and reduce reliance on imports, especially from China. The scheme, launched in April, targets domestic capability for electronic components like printed circuit boards, which are largely imported. The budget also introduces ISM 2.0 to support semiconductor manufacturing and proposes tax exemptions for foreign companies providing capital goods to electronic manufacturers. Additionally, a ₹10,000-crore outlay is proposed to develop
biologics and biosimilars, with plans to create over 1,000 clinical trial sites.
Why It's Important?
The budget's focus on electronics and semiconductor manufacturing is crucial for reducing India's dependency on imports and enhancing its global competitiveness. By bolstering domestic production, India aims to secure its supply chains and gain preferential market access under the India-EU FTA. The initiatives are expected to attract investments, create jobs, and support the country's economic growth. The emphasis on biologics and biosimilars could position India as a leader in advanced medical therapies, potentially benefiting the healthcare sector and patients with diseases like diabetes and cancer.
What's Next?
The government's initiatives are likely to attract significant investments in the electronics and semiconductor sectors, potentially leading to increased job creation and economic growth. The focus on biologics and biosimilars may spur advancements in medical research and development. However, the market's reaction to the budget, particularly the fall in the NSE Pharma index, indicates potential challenges in investor confidence, which the government may need to address.
