Union Budget 2026-27: FDI improves, but excess capacity remains

  Challenges 

 

> Manufacturers still have excess capacity to utilise, hindering new investments

 

> Though net FPI outflow is taken care of by larger net FDI inflows, uncertain global developments pose risks

 

Takeaways 

 

> The Budget proposes to facilitate sales by eligible manufacturing units in Special Economic Zones to Domestic Tariff Area at concessional rates to increase capacity utilisation  

> The Budget provides tax holiday to any foreign company offering Cloud services globally by using data centre services in India, till 2047