India's 2026 Budget: Our House View

India’s 2026 Budget: Our House View

At a Glance:

• India’s 2026 Budget locks in a capex-led growth path centered on industry and infrastructure

• Central capex at ₹12.2 trillion ($135.6 billion) in FY27, ~5x a decade ago

• Multi-year GOI capex programmes help reduce policy and execution risk for long-dated projects

• Rupee weakness now the key swing factor for FX-adjusted returns

• EU–India pact and advancing US–India deal improving market access for global investors

India’s Budget Locks In a Decade of Industrial and Infrastructure Build-Out

India’s 2026 Union Budget is a clear signal: New Delhi is committing to a capital-expenditure-led growth path, with industry and infrastructure at the center of its economic strategy, positioning India to attract substantially higher volumes of long-term private capital. For global investors, the message is continuity with an upgrade: sustained public investment, deeper manufacturing ecosystems, and clearer rules for logistics and green industry that widen the opportunity set across core infrastructure and industrial platforms.

Over the past decade, India has shifted from consumption-heavy budgets to an investment-driven framework, with central capital spending now above 3 percent of GDP and budgeted at 12.2 trillion rupees ($147 billion) in FY27, almost five times from a decade ago. For investors, the shift is in the consistency and focus of that spend: railways, logistics, urban infrastructure and manufacturing are being financed as multi-year programmes with identifiable project pipelines, which allows long-duration private capital to scale.

The Economic Survey notes that sustained public capital expenditure is helping crowd in private corporate investment, and this Budget pushes that approach further. For institutional capital, this is effectively a government-driven reduction in policy uncertainty and execution risk for long-dated cash flows.

Infrastructure is at the core of this shift. Rail remains the flagship, with high-speed passenger and freight corridors, ports and waterways, and multimodal logistics all being funded as linked programmes designed to cut costs and tighten networks. At the same time, urban growth corridors in tier-2 and tier-3 cities are being equipped with the transport, basic urban infrastructure and industrial ecosystems needed to anchor rail-linked warehousing, inland logistics and mid-market urban transport over the next cycle.

Industrial policy is also moving decisively from isolated plants to full ecosystems. Semiconductor Mission 2.0, an expanded electronics components push, mega textile and chemical parks, rare-earth corridors and a domestic container terminal build-out all point toward cluster-based manufacturing with plug-and-play infrastructure, clearer demand visibility and long-term offtake in sectors from electric vehicles and renewables to electronics and defence.

For mid-market financial sponsors, that shifts the opportunity set toward scalable platform strategies in industrial and logistics real assets and targeted growth capital into businesses embedded in these clusters. In parallel, initiatives such as the 200 billion rupee ($2.22 billion) Carbon Capture, Utilisation and Storage programme and efforts to improve receivables discipline start to de-risk funding and transition risk in power, heavy industry and the broader industrial value chain.

For a long-horizon international investor, the currency is now the key swing factor in the India capex story. The underlying fundamentals are strong, but over the past year the rupee has been among Asia’s worst-performing major currencies, eroding dollar returns on otherwise compelling assets and raising the hurdle for new global investor commitments. If India wants today’s project pipeline to be matched by larger, stickier foreign allocations, FX management and clearer signalling around the currency will matter as much as the quality of the underlying opportunities.

This Budget also coincides with a step-change in market access, with the EU-India trade pact concluded and a US-India agreement now moving up the agenda, both designed to deepen trade, FDI and supply-chain integration. From an allocator’s perspective, the combination of better access, more transparent rules and a more predictable currency will shape whether global investors are willing to commit fresh capital to India, and at what scale.

For Synergy Capital, this Budget enlarges the investible universe in the sectors we know best and improves the underlying quality of the cash flows we underwrite. That gives us more ways to be constructive on India over the next decade, even if the pace and size of commitments will continue to be shaped by currency stability.

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Synergy Capital's investment management company, Synergy Management (DIFC) Limited, is regulated by the Dubai Financial Services Authority (DFSA).