The United States-India Strategic Partnership Forum (USISPF) has commended India’s Minister for Finance and Corporate Affairs, Nirmala Sitharaman, and the Government of India for presenting a robust Union Budget 2025-26. The forum noted that the budget lays out a “strong blueprint for propelling economic growth,” aligning with the government’s vision of a $5 trillion economy.

Emphasizing financial modernization, the budget introduces strategic investments and key tax reforms, signaling India’s commitment to building a resilient, inclusive, and globally competitive economic environment, USISPF noted in a statement on February 2, 2025.

The forum highlighted the budget’s continued focus on fiscal consolidation, with the fiscal deficit projected to decline to 4.4 per cent from 4.8 per cent the previous year. This reduction is driven by a substantial increase in net tax revenues alongside a measured rise in expenditures.

“We especially appreciate the shift in spending priorities this year, with greater attention to domestic consumption to support growth through increased domestic demand,” USISPF noted. The forum also welcomed increased allocations for rural and urban development, social welfare, and the Northeast states, while acknowledging more moderate capital investment increases as past allocations in key sectors such as transportation and telecommunications continue progressing through the investment cycle.

On the policy front, USISPF praised major reforms in financial services, technology, and agriculture, recognizing their potential to attract investment and drive innovation. The forum specifically welcomed the government’s initiative to establish a new Centre of Excellence for Artificial Intelligence (AI) in education.

USISPF also applauded the removal of the foreign direct investment (FDI) cap and governance simplifications in the insurance sector, calling it a “landmark reform,” that will unlock fresh capital, foster innovation, and expand insurance penetration nationwide.

Tax reforms featured prominently in the budget, with a strong emphasis on simplifying compliance and incentivizing investment. Measures such as raising the income tax threshold aim to boost domestic demand by increasing disposable income. Additionally, the customs duty structure has been streamlined, reducing the number of tariff rates to eight and introducing duty cuts on telecom infrastructure, laboratory chemicals, and essential medicines, USISPF added. 

USISPF President and CEO Mukesh Aghi expressed confidence in the budget’s potential to accelerate India’s economic growth, attract investment, and strengthen U.S.-India economic ties. “USISPF is confident that the budget will accelerate India’s economic growth, drive increased investments, job creation, and innovation, while further cementing its status as a global economic powerhouse,” adding “We eagerly anticipate the positive impact of these measures on the Indian economy attracting more American investments into India and the deepening of economic and commercial ties between our two democracies.”

Aghi reiterated USISPF’s commitment to supporting India’s vision for prosperity and inclusion, emphasizing the significance of FDI liberalization, simplified KYC processes, and income tax reforms in stimulating economic activity.

Tarun Bajaj, Chairperson of the US-India Tax Forum, emphasized the budget’s focus on fostering consumption, economic expansion, and job creation. 

“The Union Budget 2025, presented by Finance Minister Nirmala Sitharaman, lays out a roadmap for boosting consumption and accelerating growth and employment. It has a strong focus on simplifying the tax regime, boosting domestic manufacturing, and on ease of doing business, deregulation, and decriminalization. The budget emphasizes ‘Make in India, make for the world’ and aims to strengthen India’s position as a global economic powerhouse.”

A key highlight of the budget is the introduction of a new Income Tax Bill aimed at simplifying tax laws, added Bajaj. Additionally, international taxation reforms are set to create a more favorable environment for cross-border businesses, further positioning India as an attractive destination for global investments, he stressed. 

In a separate statement, President of the United States India Business Council (USIBC), Ambassador Atul Keshap, welcomed the union budget as well. 

“USIBC welcomes the presentation of the Union Budget 2025-26, which emphasizes crucial sectors like agriculture, MSMEs, investment, and exports, reinforcing India’s role as a dynamic player in the global economy,” noted Ambassador Keshap. “As the world’s fifth-largest economy and a critical partner in the Indo-Pacific, India’s continued economic reforms are essential to strengthening commercial ties with the United States and unlocking new growth opportunities.”

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