India Budget 2026: What UAE NRIs, businesses expect this February 1st

Dubai: India’s Union Budget 2026–27 is approaching at a time when global uncertainty remains high and India’s growth story is still holding firm. For UAE expats and NRIs, this Budget matters most for how it shapes taxes, investment flows, and long-term economic direction.

Early signals from policymakers, economists, and business groups now offer a preview of what could shape the February 1 Budget. These include fiscal discipline, higher investment, tax certainty, job creation, and support for new-age industries.

Know what is coming, what experts expect, and what business leaders want from India Budget 2026:

The government plans to anchor Budget 2026 to fiscal discipline and debt control under the “Viksit Bharat” roadmap. Mahendra Dev, Chairman of the Economic Advisory Council to the Prime Minister, said the Budget will continue to prioritise the fiscal deficit and debt-to-GDP ratio.

“The budget is part of the Viksit Bharat roadmap and the drafters will stick to the fiscal deficit. Also, the debt to GDP is the main indicator, so they will stick to that,” Dev said while speaking on the sidelines of a SKOCH Group event.

He said India has made steady progress since the pandemic, with the fiscal deficit falling from about 9% during COVID to around 4.8% this year. The government is now targeting a deficit of about 4.4% going forward.

Central government debt stands at 56.1% of GDP, while combined central and state debt is about 80%. Dev said this could decline to around 76% by 2030, signalling long-term efforts to strengthen India’s balance sheet.

For UAE-based NRIs and overseas investors, this points to policy continuity and a focus on macroeconomic stability rather than sudden fiscal shifts.

Dev said sustained high growth will need a stronger investment push across the economy. He explained that achieving 7% to 8% growth requires an investment rate of about 35%, compared with the current level of around 30%.

“If you want to achieve 7 to 8 per cent growth, you need around a 35 per cent investment rate,” he said, stressing that India must raise both public and private investment.

He also underlined the need to improve how efficiently capital is used. “The capital-output ratio has to be improved from the present 5 to about 3.5 to 4,” Dev said, highlighting better utilisation of infrastructure and industrial assets.

Dev also pointed to total factor productivity, which includes gains from technology, innovation, and efficiency beyond labour and capital. “This will improve the efficiency,” he said, linking productivity gains to long-term competitiveness.

For NRIs tracking India’s infrastructure, manufacturing, and technology sectors, this suggests continued support for capital spending and industrial expansion.

Dev said geopolitical tensions and tariff-related uncertainties remain key risks for the global economy. These challenges, he said, are pushing India to deepen its focus on self-reliance.

“Now the geopolitical concerns are there, so India’s response to this is Atmanirbharata,” he said, referring to India’s strategy of building domestic capacity.

He added that India wants to build globally competitive manufacturing capabilities while maintaining quality standards. “We should produce competitive manufacturing and quality products, and others will invest in India,” Dev said.

Dev also cited reforms over the past decade, including GST, income tax changes, labour codes, FDI liberalisation in insurance, and opening the nuclear energy sector to private participation. “All these things will increase the efficiency and we need to have more private capital and also increase FDI,” he said.

For UAE-based business owners, this reinforces expectations of continued policy backing for manufacturing, energy, and strategic industries.

President Droupadi Murmu has approved the summoning of Parliament for the Budget Session 2026 from January 28 to April 2. Union Parliamentary Affairs Minister Kiren Rijiju said the session will be held in two phases.

“The Session will commence on 28 January 2026 and continue till 2 April 2026,” Rijiju posted on X, adding that the first phase ends on February 13, with Parliament reassembling on March 9.

Reports say Finance Minister Nirmala Sitharaman is likely to present the Union Budget on February 1, which falls on a Sunday this year and would require special arrangements. The Economic Survey is expected to be tabled on January 29 or 30.

The session traditionally begins with the President’s address to a joint sitting of both Houses on January 28. This speech outlines the government’s policy priorities ahead of Budget discussions.

EY India said the upcoming Budget will play a critical role in sustaining India’s growth momentum while balancing fiscal discipline and competitiveness. The firm called for a forward-looking fiscal strategy that boosts investor confidence and private sector participation.

Sameer Gupta, National Tax Leader at EY India, said the Production-Linked Incentive scheme could expand into emerging technology sectors. “To stimulate private investments, the existing PLI scheme may be extended to cover new technology sectors such as AI, space, and robotics,” he said.

He added that higher public investment in AI, generative AI, robotics, and space could act as a catalyst for private capital. “Targeted incentives for the emerging industries will be crucial in driving innovation and attracting both domestic and foreign investors,” Gupta said.

EY also proposed indirect tax reforms, including a one-time customs dispute resolution scheme, longer validity for advance rulings, and tariff rationalisation. On direct taxes, it stressed smooth implementation of the New Income Tax Act, 2025, along with fewer rate changes and a simplified TDS framework.

KPMG India said individuals are likely to look for relief measures in Budget 2026. The firm suggested raising the standard deduction for salaried employees to ₹100,000.

It also recommended extending timelines for filing belated and revised returns. This, KPMG said, would help taxpayers with cross-border income whose foreign tax details are often finalised late.

“In cases, especially when individuals with cross-border investment and income file tax returns, their home or host country details are not finalised,” the firm said, explaining risks of under-reporting and over-reporting.

KPMG also called for allowing housing loan interest deductions against salary income under the new tax regime. On the corporate side, it sought clearer exemptions for foreign companies, MAT relief in certain cases, and GST refund reforms to improve liquidity.

Business leader and former Infosys board member TV Mohandas Pai said the Budget must keep employment at its core. “The Budget for 2026–27 must keep up the focus on jobs, jobs, and jobs,” he said.

Pai said 1.2 to 1.4 crore new people are joining EPFO every year. “Don’t believe all these leftist JNU people who say there are no jobs. The jobs are happening,” he said.

He pointed to India’s youth bulge, noting that around two and a half crore young people enter the workforce annually. He said most jobs pay under ₹20,000, making high-paying urban jobs a major priority.

Pai backed expanding the Kaushal scheme, creating 350 special employment districts, and offering incentives for companies that hire and train workers in poorer regions.

Pai also stressed the need to scale up funding for innovation and startups. He said Indian startups received about $160 billion over the past 11 years, compared with $845 billion in China and $2.35 trillion in the US.

“So we need more funding,” Pai said, arguing that India should invest far more in AI, deep technology, and venture capital. He questioned why India cannot spend ₹50,000 crore a year on innovation.

He cited China’s heavy investment in AI and electric vehicles and said India must move faster. For NRIs invested in startups, venture funds, and technology, these demands shape expectations from Budget 2026.

Budget 2026 is shaping up around clear pillars: fiscal discipline, public investment, tax certainty, sector-specific incentives, job creation, and support for innovation. These themes cut across both policymaker statements and private-sector expectations.

For UAE-based Indians, the Budget could influence cross-border tax planning, real estate decisions, manufacturing investments, startup funding, and long-term portfolio strategies. The official proposals will be unveiled on February 1.

Until then, economists, firms, and business leaders are setting the tone. Which areas would impact you most this year — taxes, investments, or remittance-related reforms?