The U.S.-India Strategic Partnership Forum (USISPF) has welcomed the Union Budget 2026–27, presented by Union Minister of Finance and Corporate Affairs Nirmala Sitharaman, commending the Government of India for delivering a “progressive and comprehensive fiscal framework” that supports “sustained growth, job creation, and enhanced ease of doing business.”

In a statement issued on February 1, USISPF said the Budget’s emphasis on “technology-driven reforms, sectoral competitiveness, and trade facilitation” closely aligns with the forum’s priorities and strengthens India’s appeal as a global investment destination.

USISPF said it particularly welcomes the comprehensive “customs reforms,” which reflect a strong commitment to modernizing trade processes and improving logistics efficiency. The rollout of end-to-end digital and technology-enabled solutions, including AI-powered non-intrusive inspection, phased scanning of all containers at major ports, and the extension of the Single Window mechanism to express cargo, is expected to enhance transparency, reduce dwell times, and streamline cargo movement.

“On the tariff front, targeted customs duty rationalization supports India’s manufacturing and energy transition priorities,” the statement noted. “Basic Customs Duty has been reduced to nil on critical minerals, solar manufacturing inputs, capital goods for Li-ion Battery Energy Storage Systems (BESS), nuclear power equipment, select electronics and aircraft components and MRO raw materials, and certain critical drugs and medicines.”

Export-oriented sectors such as leather and footwear will benefit from extended duty-free input windows, while baggage duty on personal imports has been rationalized from 20 percent to 10 percent. According to USISPF, these measures are expected to lower input costs for sunrise sectors, simplify the tariff structure, and strengthen India’s export competitiveness.

The forum also highlighted significant reforms in direct taxation and transfer pricing, including measures aimed at simplifying transfer pricing and safe harbor rules to enhance competitiveness and reduce litigation for the IT services sector and Global Capability Centres (GCCs).

“Key reforms include broadening safe harbor eligibility to ₹2,000 crore, consolidating all IT services into a unified category with a 15.5 percent safe harbor margin, automating approvals to reduce direct tax interface, and fast-tracking Advance Pricing Agreements (APAs) within a two-year timeline extendable by six months,” the statement said. It added that the extension of the modified return facility is expected to improve predictability and encourage investment.

USISPF further noted that the Budget provides a long-term tax holiday until 2047 for cloud services delivered through local data centers. The forum said this policy has the potential to catalyze large-scale global investment, expand export revenues, and drive long-term job creation and capability development. It also welcomed measures aimed at nurturing the local AI, IT, and data center ecosystem, which it said would strengthen India’s technology base, enhance competitiveness, and position the country as a global hub for advanced digital services.

Beyond customs and tax reforms, the Budget places emphasis on key sectors including healthcare, skills development, semiconductors, electronics manufacturing, logistics, and agriculture and allied services. USISPF pointed to India Semiconductor Mission 2.0 and the ₹40,000 crore Production Linked Incentive scheme for electronics as signals of sustained government support for high-technology manufacturing and supply chain development.

The forum also welcomed the government’s announcement of a high-level committee on banking to review the sector’s structure, efficiency, and readiness to support India’s next phase of growth while safeguarding financial stability, inclusion, and consumer protection. According to USISPF, this initiative is critical for strengthening capital intermediation, mobilizing resources efficiently, and enabling investment that drives broad-based economic growth.

President and CEO of USISPF, Mukesh Aghi, said: “The Union Budget 2026–27 advances critical reforms across customs, taxation, and strategic sectors that enhance competitiveness, boost investment, and modernize India’s economic architecture.” 

He added, “The support for semiconductors, electronics manufacturing, healthcare, agriculture, and logistics will help fuel next generation growth. The Government’s banking initiative is also a key enabler for capital intermediation and investment, ensuring that financial resources flow efficiently to fuel growth across sectors.”

Aghi also welcomed the Finance Minister’s announcement of a long-term tax holiday for cloud services delivered through local data centers, saying the policy has the potential to replicate the impact of early 2000s IT services incentives by catalyzing global investment, expanding exports, and generating long-term employment and capabilities.

“Industry also welcomes the measures announced to nurture the local AI, IT, and data center ecosystem,” he said, adding that incentives for investment, infrastructure support, and innovation will strengthen India’s technology ecosystem, enhance competitiveness, and position the country as a global hub for advanced digital services.

“While the Budget delivers significant policy progress, USISPF remains committed to working closely with the Government to address ongoing industry priorities, including strengthening skills development, accelerating dispute resolution, and enhancing infrastructure and financial sector frameworks,” Aghi said. “We look forward to a constructive dialogue to ensure that India’s growth journey remains inclusive, forward-looking, and globally competitive.”

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