Union Budget 2026 | Several hits, few misses in budget for Gulf NRI businesses

Dubai: The Union Budget 2026-27 on Sunday evoked mostly positive response from Indian businesses operating in the UAE and across the Gulf region, with some commending the steps taken on critical areas such as semiconductors and some calling for greater focus on welfare schemes.

Finance Minister Nirmala Sitharaman, during her budget presentation, said that the India Semiconductor Mission 2.0 (ISM 2.0) will focus on producing equipment and materials designed for full-stack Indian IP (intellectual property).

Kamal Vachani, Deputy CEO, Group Director & Partner, Al Maya Group and Regional Director, Electronics and Computer Software Export Promotion Council (ESC), hailed the provisions for the India Semiconductor Mission 2.0.

“Semiconductors are critical for electronics, telecom, automotive tech, defence systems, and AI. Historically, India imported a large share of chips. ISM 2.0 aims to boost domestic production and reduce reliance on foreign supply chains, lowering strategic risk and import costs,” he said.

He also said that the Rs 10,000 crore SME Growth Fund announced in the union budget is designed to support small and medium enterprises (SMEs/MSMEs) and companies with high growth potential.

“The finance minister’s announcement to increase in the outlay for the Electronics Component Manufacturing Scheme (ECMS) to Rs 40,000 crore will boost domestic manufacturing of electronic components and encourage more companies to set up production units for components like PCBs, camera modules, display parts, batteries, etc,” Vachani said.

Arun Chulani, co-founder at First Water, said the 2026-27 Budget was generally neutral, continuing with the government’s emphasis on infrastructure, manufacturing and the digital transformation of the nation.

Chulani had a guarded reaction to Sitharaman proposing to raise securities transaction tax (STT) on futures and options (F&O).

The Finance Minister announced the proposal to raise the STT on Futures to 0.05 per cent from the present 0.02 per cent, while the STT on options premium and exercise of options to be raised to 0.15 per cent from the present rate of 0.1 per cent and 0.125 per cent, respectively.

“While some market participants didn’t appreciate the increase in Securities Transaction Tax (STT) for futures and options (F&O), I personally think it is important for some guardrails to ensure that we develop a nation of investors not speculators, especially considering the SEBI report that over 90 per cent of participants lose in the F&O equity markets,” Chulani said.

Chandrashekhar Bhatia, chairman GBF Middle East, said as India sets the tone for global growth, the Indian budget becomes even more relevant, not only for Indians but for the entire world.

“As the IMF has said, India will be the growth engine of the world for many years to come. This brings responsibility and accountability,” he said.

Bhatia said that the government’s initial push reflects a reform-oriented budget. “Its impact will be felt over the next 5-10 years.” Bhavesh Talreja, founder & CEO, Globale Media, said the budget sends a strong signal to global markets that India is positioning itself as a stable, scalable, and policy-forward digital economy.

“With sustained investments in digital public infrastructure, AI enablement, and technology-led skilling, India is reinforcing confidence among international advertisers, investors, and platform partners looking to diversify beyond traditional Western markets,” he said.

According to Talreja, for the global AdTech and digital industry, this budget strengthens India’s role as both a demand market and an execution hub. “Clearer regulatory direction around data, formalisation of digital services, and continued support for innovation-driven sectors make cross-border collaboration more predictable and sustainable,” he said.

“This budget doesn’t just support domestic growth but also it deepens India’s integration into the global digital advertising and AdTech value chain,” Talreja added.