Finance Minister Nirmala Sitharaman presented the Union Budget 2026-27 in Parliament amid global economic uncertainty and shifting supply chains, while reaffirming India’s commitment to growth and fiscal discipline.
Calling it a Yuva Shakti–driven Budget, Sitharaman said it aims to turn aspirations into achievements through stronger domestic manufacturing, high-growth services, and infrastructure development. She highlighted past reforms, noting fiscal prudence, increased public investment, and advances in atmanirbharta to boost manufacturing, energy security, employment, and citizen benefits.
The first Budget prepared in Kartavya Bhawan is guided by three kartavyas: accelerating economic growth, empowering people as partners in India’s progress, and ensuring inclusive access to resources and opportunities under ‘Sabka Saath, Sabka Vikas’.
This year’s Union Budget has also provided a significant boost to India’s Medical Tourism sector as well as to measures benefiting NRIs, giving them new opportunities to invest and engage with the country. With initiatives such as regional medical hubs, enhanced healthcare infrastructure, and simplified investment rules for NRIs, the Budget opens doors for both domestic and international participation in India’s growing healthcare and financial ecosystem.
Medical tourism, health infra
Giving a boost to India’s medical tourism sector, Finance Minister Nirmala Sitharaman proposed a new scheme to help states develop five regional medical hubs in partnership with the private sector.
Presenting the Union Budget 2026-27, she said the hubs will function as integrated healthcare ecosystems, combining treatment, education and research, along with AYUSH centres, medical value tourism facilitation centres and infrastructure for diagnostics, post-care and rehabilitation, while creating jobs for healthcare professionals.
Citing the growing global interest in Ayurveda post-Covid, the minister also announced three new All India Institutes of Ayurveda to strengthen research and academics. In August 2023, the Centre introduced the AYUSH Visa category to promote inbound wellness and healthcare travel to India.
The Budget also unveiled BioPharma Shakti, a Rs 10,000-crore (£810 million) initiative spread over five years to position India as a global biopharma hub and strengthen the life sciences and biotechnology ecosystem. The scheme aims to boost domestic production of advanced medicines such as biologics and biosimilars, reduce import dependence, and align drug regulation with global standards through a stronger CDSCO. The WHO Global Traditional Medicine Centre in Jamnagar will also be upgraded to support evidence-based research and training.
Mental health received focus with plans for a second NIMHANS campus in North India and the upgradation of national institutes in Ranchi and Tezpur. The government also proposed a comprehensive care ecosystem, including training 150,000 multi-skilled caregivers and adding 100,000 allied health professionals over five years. The Ministry of Health and Family Welfare was allocated Rs 1.06 lakh crore (£8.59 billion), while the Ministry of Ayush received Rs 4,408.93 crore (£357.12 million). The Budget proposed establishing a network of 1,000+ accredited Indian clinical trial sites.
Huge boost for NRIs
The Budget 2026 brings several measures beneficial for NRIs. One key initiative allows individuals living abroad to invest in Indian stocks through the Portfolio Investment Scheme. Experts say this move could strengthen India’s pool of long-term, stable capital, especially at a time when foreign portfolio investor inflows have slowed. Other measures for NRIs include doubling the individual investment limit for Persons Resident Outside India (PROIs) from 5% to 10%, and raising the overall limit for all PROIs from 10% to 24%. The Budget also allows NRIs to invest in Indian equities through the portfolio route.
Finance Minister Nirmala Sitharaman simplified TDS on property sales by non-residents in the Union Budget 2026. Resident buyers can now deduct and deposit TDS using a PAN-based challan, eliminating the need for a Tax Deduction Account Number (TAN).
TDS is deducted at the time of payment on income such as salary, interest, rent, professional fees, dividends, and property transactions, and is adjusted against the final tax liability. The Budget also introduced a one-time six-month foreign asset disclosure scheme for students, young professionals, expatriates, and relocated NRIs. For undisclosed overseas income/assets up to Rs 1 crore (£81,000) (Category A), taxpayers will pay 30% tax plus 30% in lieu of penalty with immunity from prosecution. For assets already taxed but not declared (Category B), up to Rs 5 crore (£405,000) will get immunity on payment of Rs 1 lakh (£810). Additionally, TCS on overseas tour packages, education, and medical expenses under the Liberalised Remittance Scheme will be reduced to 2%, down from 5-20%.
The government has raised the duty-free allowance for imported goods carried by passengers to Rs 75,000 (£608) under the new Baggage Rules, 2026, replacing regulations that had been in force for nearly a decade. The revised limit applies to Indian residents and tourists of Indian origin arriving by air or sea, up from the earlier Rs 50,000 (£405).
The duty-free allowance for foreign tourists has also been increased to Rs 25,000 (£203) from Rs 15,000 (£121). In addition, Indian residents or tourists of Indian origin returning after staying abroad for over a year can bring duty-free jewellery, up to 40 grams for women and 20 grams for others, as part of their bona fide baggage. Jewellery includes items of personal adornment made of precious metals, with or without stones.
The Union Budget 2026 has proposed a five-year tax exemption on overseas income for non-resident (NRI) professionals visiting India under government-notified schemes. The move is aimed at attracting global talent by providing tax certainty on income earned abroad. The exemption will apply only to income that accrues or arises outside India, starting from the year of the professional’s first visit to India for rendering services. To be eligible, the individual must have been a non-resident for the five consecutive tax years immediately preceding their first year of service in India.
Big key takeaways from the Union Budget 2026
To support smallest businesses, Finance Minister Nirmala Sitharaman announced new funds, including a Rs 2,000-crore (£162 million) top-up for the Self Reliant India Fund to aid capital-starved micro enterprises and a Rs 10,000-crore (£810 million) SME Growth Fund to scale high-potential firms, linked to incentives for productivity, formalisation, and export readiness. A scheme to revive 200 legacy industry clusters is also planned.
In Union Budget 2026, FM Nirmala Sitharaman raised capital expenditure to Rs 12.22 lakh crore (£99.0 billion) , up 11.5% from Rs 10.96 lakh crore (£88.8 billion) last year. The funds will boost roads, railways, ports, logistics hubs, and urban infrastructure, creating jobs while enhancing long-term productivity. Additionally, seven high-speed rail corridors connecting key cities, including Mumbai-Pune, Hyderabad-Bengaluru, Chennai-Bengaluru, and Delhi-Varanasi, will be developed as environmentally sustainable “growth connectors.” A dedicated freight corridor from Dangkuni (West Bengal) to Surat (Gujarat) has been announced, along with plans to operationalise 20 new national waterways to boost cost-efficient cargo transport.
India announced a $4.3 billion (£3.14 billion) boost for electronic component manufacturing, with special focus on semiconductors, rare earths, and biopharma. A key highlight is ‘Semiconductor Mission 2.0’, allocated Rs 8,000 crore (£6.48 billion) to expand the country’s chip-making ecosystem. A key highlight of Union Budget 2026 is the focus on rare earths, with Finance Minister Nirmala Sitharaman proposing dedicated corridors in Odisha, Andhra Pradesh, Tamil Nadu, and Kerala to promote mining, research, processing, and manufacturing. High-tech tool rooms and digitally enabled automation bureaus will locally design and produce precision components, reducing dependence on China, which dominates global production.
The Budget 2026 highlights tourism and textiles as key sectors for growth and employment. In textiles, mega parks for technical textiles, an integrated programme, and initiatives like Mahatma Gandhi Gram Swaraj, the Natural Fibre Scheme, and National Handloom and Handicraft Programme aim to boost livelihoods and preserve heritage.
For tourism, the government will set up a National Institute of Hospitality, train 10,000 tourist guides across 20 iconic sites with IIM support, and develop eco- and wildlife tourism trails in Himachal Pradesh, Uttarakhand, J&K, the Ghats, and Odisha, Karnataka, and Kerala, promoting sustainable and responsible tourism. FM Sitharaman proposed developing 15 archaeological sites, including Indus Valley sites like Lothal, Rakhigarhi, and Dholavira, as key cultural tourism destinations. The Budget also makes international travel cheaper, cutting TCS on tour packages to a flat 2% with no minimum limit.
On taxation, simplified Income Tax rules and forms will be notified under the Income Tax Act, 2025, effective April 1, 2026, with revised return deadlines extended to March 31 for a nominal fee, though no direct tax relief was provided. The Budget also offers tax holidays until 2047 for foreign cloud service providers serving Indian customers via local resellers, signaling a push to attract global cloud players and strengthen India’s digital infrastructure, alongside faster resolution of advance pricing agreements for IT services within two years.
In her Union Budget 2026 speech, Finance Minister Nirmala Sitharaman highlighted content creation and comics as key economic focus areas, announcing Content Creator Labs in 15,000 schools and a new National Institute of Design to train students in digital, creative, and design skills for careers in animation, gaming, and the creative industries.
In education, FM Nirmala Sitharaman emphasised university townships to strengthen the link between learning, skills, and employment. The government will help states set up five college townships along major industrial and logistics corridors, featuring universities, research centres, skill hubs, and residences. The Budget also proposes girls’ hostels in all districts, funded via the viability gap fund, to improve women’s access to education, especially in STEM fields.
Story behind Sitharaman’s saree choice for budget day
Every Union Budget Day, while the spotlight is usually on numbers, policies, and tax proposals, Finance Minister Nirmala Sitharaman has added a unique tradition of showcasing India’s rich textile heritage through her saree choice.
Each year, she selects a saree that reflects regional handloom traditions, celebrates local craftsmanship, and often coincides with states heading to elections.
In Budget 2026, she wore a deep maroon-purple Kanjeevaram silk with gold zari borders, highlighting Tamil Nadu’s weaving traditions ahead of the Tamil Nadu Assembly election 2026.
Last year, for Bihar’s Assembly election 2025, she chose a handloom silk saree adorned with Madhubani artwork, celebrating the state’s folk art.
During the Interim Budget 2024, she wore a blue Tussar silk saree with Kantha embroidery, showcasing West Bengal’s artisan community ahead of the Lok Sabha election 2024, while the Full Budget 2024 featured an off-white Mangalagiri cotton saree with gold and magenta borders from Andhra Pradesh ahead of the Andhra Pradesh Assembly election 2024. In 2023, she wore silk with Kasuti embroidery, highlighting Karnataka’s traditional craftsmanship ahead of the Karnataka Assembly election 2023.
