The Union Budget of India 2025-26 is the first official budget announced by the Indian government, which is in its third five-year term, and it serves as a compass for future development.

• The theme of this year's budget is “Development for All (Sabka Vikas),” and it presents policy directions for achieving the vision and goals of a developed India (Viksit Bharat) by 2047.

The “Advanced India” vision, similar to China's “Xiaokang Society,” consist of six principles—poverty eradication, quality education, access to healthcare, skilled labor, women's economic participation, and agricultural innovation.

• The four growth engines to achieve the six principles are agriculture, small and medium-sized enterprises, investment, and exports, with an emphasis on promoting “reform” as the fuel to accelerate these growth engines.

The Union Budget focuses on strengthening the purchasing power of the middle class, expanding infrastructure investment, and enhancing the competitiveness of manufacturing

• Due to the income tax system, which has been revised for the first time in five years, tax exemptions will apply to those with an annual income of up to 1.275 million rupees (approximately 21.8 million won)

• A record-breaking budget of 11.2 trillion rupees (approximately 191 trillion won) has been allocated to expand investment in infrastructure, particularly transportation and energy (including renewable energy and nuclear power).

• Under the “National Manufacturing Mission,” policies have been announced to nurture future core industries such as electric vehicles, clean tech, electronics manufacturing (including semiconductors), defense, and shipbuilding.

India Inc. welcomes this year's budget as the government's long-term vision and expects overall consumption recovery and economic growth due to income tax cuts.

• The automotive industry expects the strengthening of the EV ecosystem, the steel industry expects its green transition to facilitate due to nuclear power investments, and the electronics industry expects the realization of the 500 billion dollar target by 2030.

• On the other hand, the semiconductor industry is demanding additional policy announcements, saying that the details of the “India Semiconductor Mission 2.0” policy have not been announced.

As the Indian government's policy keywords are “self-reliant India” and “advanced India,” Korean companies need to secure a business foothold before the “door of opportunity” closes with the success of India’s self-reliance policy.

• When entering the Indian market in the future, companies should consider joint ventures with local leading companies or global companies, and evaluate the effectiveness of not only greenfield investments but also mergers and acquisitions (M&A) and brownfield expansions.