Union Budget 2025–26 marked a structural pivot for India’s food and beverage economy. What appeared, on the surface, as a steady, sector-supportive budget has effectively become the policy template against which Budget 2026 will be evaluated. By prioritising supply-chain resilience, scaling food processing and frozen foods, and embedding sustainability into incentives, the government repositioned food from a mere inflation-sensitive category to a strategic growth lever for employment, exports, and regional development.
The sharper shift came through GST realignment. Zero-rating daily staples such as chapatis, rotis, paneer, and UHT milk, alongside a consolidated 5 percent slab for dairy, processed foods, snacks, personal care, and baby products, altered cost structures across FMCG and food service. With consumer inflation projected to ease by up to 1.1 percentage points, the budget created consumption headroom at a time when MSME financing, women-led entrepreneurship, and green infrastructure were being actively encouraged—particularly across Tier II and Tier III markets.
What FMCG Leaders Are Really Asking from Budget 2026
As Union Budget 2026 approaches, the FMCG leaders’ expectations are narrowing to a few decisive asks: fix GST inefficiencies, revive consumption, and enable manufacturing at scale. The intent is acknowledged, but delivery will be the real test.
GST remains the most immediate friction point. Ramesh Bafna, Chief Financial Officer, Zepto, calls unutilised input tax credit “taxes already paid by businesses,” arguing that allowing these credits to be used against reverse charge liabilities and TCS would “meaningfully improve ease of doing business” while reducing cash outflows and unlocking working capital “without revenue loss to the government.” Nikhil Doda, Co-Founder and Chief Operating Officer, Lahori Zeera, flags the same issue from the factory floor. With most FMCG products now taxed at 5 percent, he notes that higher GST on services, advertising, and machinery leads to continuous accumulation of credits, adding to “the overall cost of manufacturing and selling” and dampening appetite for fresh investment in plant and equipment.
On the demand side, industry leaders are looking to Budget 2026 to reignite consumption momentum. Ishita Malpani, Managing Director, Amruta Tea, says targeted fiscal support that boosts disposable incomes and brings clarity to GST implementation will be “crucial for stimulating consumer spending and improving affordability.” Continued investment in rural infrastructure and logistics, she adds, will strengthen the backbone of India’s consumption story while helping homegrown brands scale. A spokesperson for DS Group echoes this, urging a “consumption-driven framework” backed by higher capital expenditure, corporate tax rationalisation, and targeted manufacturing support to strengthen both household spending power and the ‘Make in India’ mission.
Food processing and frozen foods, which gained policy visibility in Budget 2025, are now seeking sharper execution. Haresh Karamchandani, Managing Director and Group CEO, HyFun Foods, believes Budget 2026 can “accelerate India’s food processing ecosystem” through PLI schemes, export-oriented incentives, cold-chain investments, and support for backward integration, helping India emerge as a dependable global supplier of value-added foods. From a startup lens, Ekansh Garg, Co-Founder and CEO, Cravicious Foods, points to gaps between policy and reality. The current Rs 1 crore subsidy cap for expansions, he says, is inadequate for capital-intensive frozen food projects, and a single-window clearance system is essential to cut through multi-departmental approvals. Easier, collateral-free access to credit would further enable companies to invest in technology and meet rising demand.
Collectively, these views underline a clear industry message: Budget 2026 must move beyond broad assurances to targeted fixes: resolving GST distortions, unlocking working capital, strengthening consumption, and backing manufacturing with policies aligned to on-ground realities.
Food Service Sets Its Budget Agenda
As Budget 2026 comes into view, food service and hospitality leaders are sharpening their demands around three themes: tax clarity, formalisation, and the removal of structural bottlenecks that slow expansion despite clear consumer demand.
For food-tech and processed traditional foods, GST remains the first hurdle. Sanket S, Founder, Scandalous Foods, says the sector is looking for “GST simplification and more balanced tax rates on processed traditional foods” to ease pressure on MSMEs and bring unorganised players into the formal economy. He links tax reform directly to growth levers such as cold-chain infrastructure and household purchasing power, arguing that targeted support for automation and easier access to credit—aligned with Atmanirbhar Bharat—can help India emerge as “a global centre for preserved traditional foods.”
Women entrepreneurship is another area where industry voices want Budget 2026 to move from rhetoric to decisive support. Meenakshi Kumarr, Chef and Founder, Anahata Cafe, calls the Budget a potential “turning point” for women-led enterprises, particularly in food and hospitality. Despite rising participation, she notes that women founders continue to face barriers in finance, mentorship, and compliance. “Many women-led ventures are operating at the grassroots level and require flexible funding models that recognise their realities rather than traditional balance sheets,” she says, advocating collateral-free credit, interest subvention, and simpler formalisation. Investment in skills, digital enablement, food safety, and sustainability training, she adds, is essential to help women entrepreneurs in Tier II and III cities scale responsibly.
From an operator’s lens, the focus is squarely on structural alignment. Pulkit Arora, Director, CYK Hospitalities, says the industry is hopeful that Budget 2026 will finally address long-pending issues such as restoration of input tax credit, recognition of hospitality as an industry, and simpler licensing. These changes, he argues, would allow businesses to focus on “quality, innovation, and consistency rather than dealing with inefficiencies.” His colleague, Simran Jeet Singh, Director, CYK Hospitalities, links policy clarity directly to expansion, noting that brands are ready to grow and markets are ready to consume. What’s missing, he says, are “clearer leasing frameworks, single-window approvals, and uniform commercial policies” that make expansion predictable rather than fragmented.
At an industry level, the National Restaurant Association of India has flagged rising cost pressures. NRAI President Sagar Daryani points to Notification No. 09/2024 on reverse charge mechanism for commercial leases, stating that it has increased costs for smaller restaurants and MSMEs. The association is calling for its review, along with reinstatement of the SEIS scheme, targeted subsidies on essential inputs, better access to debt financing, and industry status for food services. Daryani also reiterates the long-standing demand for a dedicated food services ministry to support growth, sustainability, and employment across the sector.
Together, these perspectives reinforce a consistent message to policymakers: food service and hospitality do not need incremental tweaks in Budget 2026. They need clarity, correction, and commitment to convert demand momentum into durable, nationwide growth.
What the Food Ecosystem’s Enablers Expect from Budget 2026
Beyond the food and beverage industry, the ecosystem that enables it—from protein innovation and logistics to energy infrastructure—is also lining up clear asks from Union Budget 2026. These solution providers argue that India’s next phase of food-sector growth will hinge on integrated policy support for technology, sustainability, and large-scale infrastructure.
At the intersection of food, science, and sustainability, Sneha Singh, Managing Director at GFI India, positions smart proteins as a strategic priority. With demand rising for affordable, high-quality nutrition, she says the budget must reduce capital risk through public–private partnerships and institutional procurement pilots to help alternative proteins reach price parity and scale. Singh also calls for deeper investment in agricultural R&D for underutilised pulses and indigenous crops, alongside dedicated processing infrastructure for plant-based value chains to lift farmer incomes. Linking food innovation to India’s broader bioeconomy ambitions, she notes that sustained funding under the BioE3 policy and RDI Fund—especially for shared biomanufacturing infrastructure, Bio-AI, and workforce skilling—could accelerate India’s path to a $300 billion bioeconomy and position it as a global hub for next-generation proteins.
Logistics players, meanwhile, are focused on execution and efficiency. Dipanjan Banerjee, Chief Commercial Officer at Blue Dart, says Budget 2026 must build on PM Gati Shakti by prioritising seamless physical and digital integration across air, road, rail, and multimodal corridors. Reducing dwell times, simplifying customs, and enabling smoother intermodal transfers, he argues, are critical to lowering logistics costs to global benchmarks—especially as India scales exports and e-commerce simultaneously. Banerjee also flags cross-border e-commerce reforms for MSMEs, cleaner mobility incentives, and faster adoption of EVs and Sustainable Aviation Fuel as essential to future-proof logistics while meeting climate goals.
A similar technology-first view comes from Dhruv Taneja, Founder and Global CEO of MatchLog, who stresses the need for digital innovation in inland container logistics. He points out that incentives for AI-driven freight platforms, EV trucking corridors, and multimodal hubs under Gati Shakti can cut empty miles by up to 15 percent, reduce emissions, and improve asset productivity. To scale such efficiencies nationally, Taneja calls for budgetary support for technology-led freight networks, shared inland infrastructure near industrial clusters, and end-to-end digital documentation to ease port congestion and accelerate turnaround times.
Energy infrastructure, a critical but often invisible enabler, also features prominently. Satyen Mamtora, CEO and Managing Director at Transformers and Rectifiers (India) Ltd., says India’s energy transition will require a stronger, more resilient grid. Ahead of Budget 2026, he is looking for faster approvals, a single-window mechanism to address right-of-way delays, and increased support for energy storage to enable large-scale renewable integration. A consistent policy push on grid modernisation and indigenous manufacturing of transformers and storage systems, he adds, will be key to energy security, competitiveness, and clean energy goals.
Taken together, solution providers are delivering a unified message: Budget 2026 must move beyond sector-specific incentives and invest in the connective tissue of the economy. Technology, logistics, energy, and sustainable innovation are no longer support functions—they are central to how India’s food, manufacturing, and export ambitions will be realised.
Conclusion
As Budget 2026 approaches, the conversation has moved decisively forward. The issue is no longer sector recognition, but policy depth and execution: further GST rationalisation, clarity on input tax credit, faster single-window clearances, and sharper incentives that translate intent into scale. Budget 2025 laid the foundation. Budget 2026 will determine whether India’s food and hospitality sectors merely consolidate or decisively accelerate.
