In the Union Budget 2026–27, presented by Finance Minister Nirmala Sitharaman, India’s MSMEs, entrepreneurs and startups were placed firmly at the centre of the country’s growth strategy. Moving beyond short-term relief, the Budget signalled a structural shift, one that recognises small businesses not as peripheral contributors, but as core engines of productivity, innovation and employment in India’s journey towards a Viksit Bharat.
For MSMEs, the Budget acknowledged a long-standing challenge, access to growth capital. The proposed Rs 10,000 crore SME Growth Fund signalled a move beyond survival financing toward scale financing. By combining equity support with performance-based incentives, the government aimed to help promising enterprises transition into “Champion MSMEs” capable of competing in national and global markets.
Liquidity, a persistent concern for small businesses, received a structural solution rather than a temporary fix. Strengthening the TReDS platform, mandating its use by CPSEs, and enabling invoice-backed securities reflected an understanding of cash-flow realities faced by entrepreneurs. For many founders, this marked a shift from dependence on traditional credit to a more market-linked, technology-driven financing ecosystem.
The Budget also addressed the less visible, but equally critical, pain point of compliance. By introducing Corporate Mitras, trained para-professionals to assist MSMEs with regulatory and financial requirements, the government acknowledged that time and complexity often cost entrepreneurs more than capital. This move was especially relevant for enterprises in Tier II and Tier III cities, where access to professional support remains limited.
Startups found encouragement in the Budget’s broader emphasis on innovation-led growth. From manufacturing-linked schemes and cluster-based industrial parks to AI-enabled public platforms, the policy environment aimed to create demand for startup-led solutions across sectors. Entrepreneurs working in supply chains, agritech, FinTech, logistics, and deep tech stood to benefit from this expanding opportunity landscape.
Importantly, the Budget did not separate entrepreneurship from inclusion. Women-led enterprises were given a clear pathway to scale through SHE-Marts, building on the success of the Lakhpati Didi programme. Rural and micro-entrepreneurs were brought into the formal economy through improved market access, skilling, and financing tools, turning livelihoods into enterprises.
What set Budget 2026–27 apart was its tone. It did not promise instant outcomes. Instead, it focused on ecosystems, capital, credit, skills, markets, and trust, working together to support enterprise growth.
For India’s MSMEs and startups, this Budget was less about announcements and more about alignment. Alignment between ambition and execution. Between policy intent and business reality.
And in that alignment lies the confidence that small businesses are no longer at the margins of India’s growth story.
They are at its core.
Business perspective from Leaders:
Dr. Vikram Kumar, Founder & Managing Director, SRV Media, said, “Union Budget 2026 goes beyond allocations to architect ecosystems – linking education, healthcare, creativity, and industry at scale. From university townships and regional medical hubs to content creator labs and design institutes, the focus is clearly on future skills and employability. For brands and institutions, this marks a shift from transactional communication to purpose-led narratives rooted in impact and innovation. As policy enables new talent pipelines and digital-first learning, strategic communication will be critical in building credibility, attracting stakeholders, and translating policy vision into measurable public trust and growth.”
Mohal Lalbhai, Founder & Group CEO, Matter Motor, said, “The Union Budget 2026 reinforces the Government’s long-term focus on strengthening India’s advanced manufacturing ecosystem, even as direct EV-specific incentives remain measured. The emphasis on strategic manufacturing, India Semiconductor Mission 2.0, and high-precision engineering underlines a clear shift towards capability-led growth over short-term subsidies. For electric mobility, this is critical. Future competitiveness will be driven by power electronics, battery management systems, motor technologies, intelligent vehicle platforms, innovation in alternate materials, and Advanced Integrated Drivetrain Vehicles (AIDV). The Budget’s focus on critical minerals, rare earth processing, and component ecosystems supports resilient, India-based supply chains for next-generation EV powertrains. At MATTER, built on deep in-house engineering and integrated manufacturing, this policy direction aligns strongly with our approach, enabling Indian EV companies to compete globally on performance, innovation, and export readiness in line with the Innovate in India, Make in India, Make for the World vision.”
Nitin Jain, Founder, IVYN, said, “The government’s proposal to revive 2,000 industry clusters, create a Rs 10,000 crore MSME growth fund, and establish mega textile parks is a strong signal of long-term commitment to India’s manufacturing backbone. These measures will not only strengthen MSMEs but also modernise the textile and garment ecosystem, enabling scale, innovation, and global competitiveness. At IVYN, we strongly believe that Indian textiles and garments are poised to become a dominant global force over the next decade. With supportive policies, infrastructure-led growth, and increasing foreign alignments, the sector is well-positioned to excel on the world stage.”
Rachit Soota, Founder, RYZ, said,”Reviving 2,000 textile clusters and introducing a Rs 10,000 crore MSME growth fund is a big moment for India’s textile story. As the founder of a next-gen activewear brand, I see this as an opportunity to empower the backbone of our industry, our MSMEs, our manufacturers, and the skilled artisans who make world-class products possible. Mega textile parks with modern infrastructure can truly change the game by enabling scale, innovation, and sustainable production. If implemented well, this can help Indian brands like RYZ compete globally while proudly building in India, for the world. “
Saurabh Vijayvergia, Founder & CEO, CoverSure, said, “Union Budget 2026 takes a people-first step by exempting interest awarded by Motor Accident Claims Tribunals from income tax, ensuring accident victims receive their full compensation without erosion through TDS. This intent carries forward into the Budget’s broader focus on strengthening the financial sector and positioning AI as a growth multiplier, signalling a move towards a more transparent, efficient, and consumer-protective ecosystem. For customer-backed, AI-led insurtechs like CoverSure, this creates the right environment to simplify claims, reduce friction, and restore trust in insurance as a true safety net.”
Dr. Rashida Vapiwala, Founder and CEO, LabelBlind, said, “The Finance Minister’s focus on emerging technologies such as AI as growth drivers sends a positive and timely message for India’s startup and MSME ecosystem. By placing innovation at the centre of economic growth, the Budget highlights the role of startups in helping MSMEs become globally competitive. The proposed Rs 10,000 crore fund for small and medium enterprises is an important step, as it will support high-potential SMEs in scaling operations, adopting new technologies, and building long-term strength, creating the champions of tomorrow. Initiatives like the National Quantum Mission further reflect the government’s long-term approach to strengthening deep-tech capabilities and future-ready infrastructure. As India opens up new trade opportunities through FTAs, AI-led regulatory compliance will be critical for Indian food companies to meet global standards and compete internationally. For LabelBlind, these measures reinforce our commitment to AI-led solutions, innovation, and building scalable platforms that support a resilient and inclusive digital economy.”
Gagan Arora, Founder & President, Vertex Group, Chairman of the Foreign Investors Council, and Trade Commissioner of The Indian African Trade Council, said, “This year’s Union Budget makes it clear: India is intent on gearing its services sector for an AI-powered future already reshaping IT, business process management, design, customer care, and digital delivery. Although specifics about the new committee are still to come, the message is clear: AI is being positioned as both a productivity booster and a pillar of employment strategy.
For the tech industry, this marks a shift from traditional subsidies to prioritising talent pipelines, rigorous standards, and export-ready capabilities. The real test will be translating these policy ambitions into reality through updated curricula, industry-recognised certifications, and job-ready pathways.”
Anurag Jain, CEO & Co-founder, ORISERVE, said, “The government’s renewed focus on AI and emerging technologies signals a clear intent to move India from technology adoption to technology leadership. Strengthening national missions around AI, deep-tech R&D, and innovation creates a strong foundation for building scalable and responsible digital systems. For the FinTech ecosystem, continued policy backing for the AI Mission and R&D funding will accelerate intelligent solutions that improve efficiency and financial inclusion. Initiatives like Bharat Vistaar emphasize the importance of multilingual, AI-led platforms in widening access. This approach is especially relevant for financial services, where trust, personalisation, and reach are critical.”
Anand Chandra, Co-founder & Executive Director, Arya.ag, said, “Bharat-VISTAAR brings the promise of making agri-advisory more intelligent, timely, and accessible at the farmgate. By integrating AI with AgriStack and ICAR advisories in multiple languages, it can support better decisions on crops, inputs, and markets, especially for smallholder and first-generation women farmers. The Rural Women-Led Enterprises initiative, building on the Lakhpati Didi programme, takes this further by enabling the shift from subsistence livelihoods to ownership. In our experience, such enterprises succeed when they are deeply embedded in local agri-value chains, with access to working capital, market linkages, and autonomy over key decisions. Many women-led groups are already leading the adoption of sustainable and climate-resilient practices. Strengthening them through enterprise support will generate both economic and environmental dividends. The Budget lays strong groundwork; execution will depend on how these initiatives reach real farms, in real time.”
Amod Anand, Co-Founder & Director, Loom Solar, said, “The announcements around ISM 2.0, electronics manufacturing, critical minerals, and rare earth corridors signal a fundamental shift in India’s clean energy trajectory. For the solar sector, this goes far beyond capacity expansion toward building deep technological sovereignty. India is moving from being a hardware assembler to owning critical layers of the energy-tech IP stack, control systems, forecasting platforms, and grid software that power modern solar and storage ecosystems. The rare earth corridors address a hidden but critical solar bottleneck by securing access to materials essential for high-efficiency motors, power electronics, and advanced energy systems, significantly reducing strategic dependence on China. Complementing this, customs duty exemptions for critical mineral processing, lithium-ion cell manufacturing for storage, and inputs like sodium antimonate for solar glass strengthen domestic value chains across materials, components, and technology, forming the backbone of India’s long-term energy transition and energy security infrastructure.”
Vivek Bhargava, Co-Founder, Consumer.ai, said, “What’s encouraging about the Budget’s focus on emerging technologies is that it nudges the conversation away from AI hype and toward real-world impact. National AI and quantum missions, backed by structured research funding, create the opportunity to apply intelligence where it matters most – understanding behavior, improving decision-making, and designing systems that are more inclusive by default. The real value of AI will come not from replacing human judgment, but from grounding it in observable reality and using it to make smarter choices at scale.”
Senthil Kumar Hariram, MD and Founder, FTA Global, said, “For the advertising and marketing industry, Budget 2026–27 signals a clear recognition of the services sector as a key growth engine, particularly through its focus on AI and emerging technologies. While there could have been more targeted measures for smaller service-led companies, the intent to simplify compliance, expand MSME financing, and invest in Tier-2 and Tier-3 infrastructure is a positive step. Evaluating the impact of AI on jobs and the services sector is timely for marketing and communications, as AI is already redefining how insights are generated, content is created, media is optimised, and campaigns are measured. The next step is ensuring AI adoption goes hand in hand with upskilling, enabling long-term, sustainable growth.”
Ajay Rao, Founder & CEO, Emiza, said,”The Union Budget 2026-27 further instills confidence in the consumption and manufacturing-driven growth story in India by continuing its emphasis on infrastructure development, with a special focus on MSMEs. The steps taken to enhance liquidity and growth capital for MSMEs will have a direct impact on logistics and fulfillment partners catering to small and medium-scale businesses in Tier 1 and Tier 2 cities. Contract logistics companies will find the Budget’s emphasis on technology adoption, AI- assisted skill development, and digital public infrastructure particularly relevant. As the scale and complexity of supply chains increase, data-driven demand forecasting, automated warehouses, and real-time inventory visibility are becoming increasingly important to provide faster, more reliable, and more cost-effective services for MSME supply chains. However, smooth payment cycles and simplified compliance procedures continue to be important for asset- and labor-intensive logistics companies. In summary, the Budget seamlessly weaves together infrastructure development, MSME growth, productivity, and technology to create a more robust and inclusive supply chain ecosystem in India.”
Kaushal Bansal, CEO & Co-Founder, CallerDesk, said, “Union Budget 2026–27 strengthens India’s digital infrastructure runway by encouraging cloud and data-centre investment. The tax holiday till 2047 for foreign companies providing global cloud services using India-based data centres is a strong signal to expand domestic capacity and long-term confidence in India’s cloud ecosystem. The Budget also improves policy clarity for IT services by enhancing the safe-harbour threshold from Rs 300 crore to Rs 2,000 crore and moving it to an automated, rule-driven process, steps that can reduce compliance friction. For MSMEs, the Rs 10,000 crore SME Growth Fund and the Rs 2,000 crore top-up to the Self-Reliant India Fund can improve access to risk capital. This matters because IDC projects India’s public cloud services market to reach $17.8 billion by 2027. For telecom and customer communication platforms, stronger cloud capacity can accelerate adoption of AI-led capabilities like conversational automation, real-time analytics and workflow intelligence, helping businesses improve service quality, responsiveness and operational efficiency at scale.”
Raj K Gopalakrishnan, Co-Founder & CEO, KOGO AI said, “The 2026-27 Union Budget marks the moment India officially stops participating in the global AI hype cycle and starts architecting its own Sovereign Economic Moat. For too long, the narrative has been about “AI adoption.” This budget changes the conversation to owning it. It is a defining moment where India has started treating AI as a Sovereign AI Economic Strategy. The budget doesn’t just fund AI-linked growth, but offers a fertile ground for a uniquely Indian AI ecosystem that prioritizes real-world deployment over speculative frontier models. The vision to establish an AI Economic Council and the “Sovereign AI-OS” initiative is a masterstroke in strategic autonomy. By focusing on a bottom-up, application-driven approach instead of chasing centralized compute power, the government is ensuring India’s AI evolution is grounded in the structural realities of capital efficiency, human diversity, and localized problem-solving. The tax-holiday for data centers until 2047 provides the long-term fiscal certainty needed to bring the world’s “compute gravity” to India. This, coupled with the ISM 2.0 semiconductor push, creates a full-stack environment where Indian IP can be built on Indian hardware. What is particularly resonant for KOGO is the focus on Bharat-VISTAAR and its integration with the National Mission on Natural Farming. This is the “force multiplier” in action, where multilingual, voice-first AI can be used to deliver customized advisory to millions of farmers. It proves that our path to Sovereign AI leadership is through inclusion, not just scale.”
“Furthermore, the focus on the “Education to Employment and Enterprise” framework and the “Earn and Learn” initiative acknowledges a shifting reality: to be an AI power, we must prepare future generations to be able to work in an AI-driven world. By embedding AI into the school curriculum and creating a dedicated AI Safety Institute, India is building a resilient ecosystem that balances innovation with public interest safeguards. With the removal of export hurdles for SMEs and the infusion of high-velocity risk capital through the Growth Funds of ₹10,000 crore, the message is clear: India is no longer the back office of the tech world. We are now its Sovereign Front Office, architecting AI solutions that are decentralized, interoperable, and undeniably world-class,” he added.
Khushboo, Founder & CEO, Slay Media said, “The Union Budget 2026 establishes digital finance and fintech, and technology-based development as its primary achievements. The government-backed initiative, which improves credit access for startups and MSMEs, will transform the entrepreneurship
landscape. Our creative marketing agency looks forward to digital platform development through policy support because it will enable us to create new solutions that connect brands to their target communities. The budget achieves its aim of supporting India’s growth path by creating easier compliance processes, which will help our business and the entire country thrive.”
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