Manufacturing sector calls for pro-local manufacturing policies, GST reductions, and tax reforms ahead of Union Budget 2025-26

New Delhi [India], January 27 (ANI): Days ahead of the Union Budget 2025-26 on February 1, the industry players in the manufacturing sector have called for favourable policies boosting local manufacturing, reducing GST on consumer durables, and tax reforms to increase disposable incomes and stimulate consumer spending.
As the Union government is keen to increase share of manufacturing in GDP from 17 per cent to 25 per cent, the industry players are expecting financial incentives for expanded production-linked incentive (PLI) schemes, support for sustainable manufacturing and tax exemptions among others.
Simarpreet Singh, Executive Director and CEO of Hartek Group, commended the Indian government's strides in supporting the renewable energy sector, particularly solar power.
He further highlighted the importance of continued support for production-linked incentive (PLI) schemes and infrastructure development, which would drive private sector participation, foster innovation, and enhance India's manufacturing capabilities.
Meanwhile, Nileshkumar Kukalyekar, Business Director for South Asia, Middle East, and Africa at Envalior, emphasised the need for greater investment in sustainable manufacturing and innovation. With global demand for environmentally responsible products rising, Kukalyekar urged the government to focus on policies that incentivize the use of recycled and bio-based materials.
"We urge the government to focus on policies that incentivise the use of recycled and bio-based materials, support research into new green technologies, and promote circular economy models," he said.
Strengthening such initiatives, according to Kukalyekar, would help accelerate India's transition to a low-carbon economy.
On the technological front, Ankit Kumar, CEO of Skye Air, voiced strong support for the development of the drone sector, a technology with the potential to revolutionise logistics, especially in e-commerce and quick-commerce. Kumar suggested that the upcoming budget should prioritize "tax exemptions or reduced GST rates on drone services, manufacturing, and maintenance," which would significantly lower operational costs and make drones more accessible to businesses.
He also called for expanding funding under the PLI scheme to include drone services and infrastructure, such as drone ports, as well as simplifying regulatory processes for drone operations, particularly for Beyond Visual Line of Sight (BVLOS) deliveries.
Saurabh Rai, CEO of Arahas Technologies, highlighted the need to strike a balance between rapid technological advancements, particularly in AI, and the foundational needs of sectors like Geographic Information Systems (GIS) and space tech.
Rai expressed concern about the underfunding of critical projects such as GIS, which are essential for disaster preparedness, land optimization, and sustainable urban planning. He urged that the budget prioritize "boosting funding for GIS, prioritizing sustainability, and directing AI innovation towards solving real-world problems."
Harshit Aggarwal, founder and CEO of Novamax Appliances, echoed the sentiments of many industry leaders, urging the government to continue reinforcing policies that support local manufacturing.
Aggarwal said, "We hope the government to continue reinforcing policies on local manufacturing support, empowering MSMEs, startups, and the 'Made in India' brand."
He called for the expansion of initiatives like the Pradhan Mantri Mudra Yojana, which has been instrumental in providing easy access to credit for MSMEs, enabling them to innovate and scale up. Aggarwal also noted the significant progress made under the PLI schemes, which have led to an increase in domestic production and job creation.
Saket Gaurav, Chairman and MD of Elista, called for measures to strengthen the consumer durables industry.
He recommended expanding the PLI scheme and reducing import duties on critical components to bolster domestic production capabilities. "Rationalizing GST rates, especially on larger screen televisions currently taxed at 28 per cent, would enhance affordability and encourage the adoption of advanced technology," he said.
Gaurav also advocated for better financing options for consumers and policies aimed at export subsidies, which would help Indian brands compete in global markets.
The need to strengthen India's MSME sector was highlighted by Amit Mittal, founder and MD of Chandpur Paper, who pointed out the importance of incorporating sustainability into operations to achieve net-zero emissions by 2070.
"We expect the much-awaited Union Budget 2025 to focus on green subsidies, low-interest loans, and tax breaks that make sustainability more accessible and economically feasible for enterprises," Mittal said.
He also advocated for increased access to carbon credit markets and subsidies for green technology to support MSMEs in their transition toward sustainable practices.
Going further, HS Bhatia, MD of Daewoo India, expressed concerns about the taxation burden on the middle class and its impact on consumer spending.
He called for measures to reduce the tax burden on the middle class, noting that it would improve disposable incomes and consumer spending capacity.
Bhatia emphasized, "Just as the government has reduced corporate tax and introduced several PLI initiatives for companies to boost manufacturing, there is a need to ensure more disposable incomes for people by reducing the tax burden of the middle class."
Ashish Munjal, Co-Founder and CEO of Sunstone, underscored the need for fiscal incentives to foster collaboration between industry and academia. He suggested that investments in R&D within higher education and skill development programs could bridge employability gaps and enhance the sector's potential. (ANI)