iNDICA NEWS BUREAU-
While India’s Union Budget 2025-26 found favor with the U.S.-India Business Council (USIBC), there were certain areas of concern raised by the business council that connect the two largest democracies in the world and inspire sustainable solutions to business challenges.
“While the budget outlines a vision for economic resilience, technological advancement, and global competitiveness, India’s growth trajectory requires sustained and deeper reforms. Foreign direct investment remains steady but has not seen significant acceleration, and businesses continue to navigate complex regulatory landscapes. USIBC urges a more ambitious push for systemic reforms in taxation, regulatory frameworks, and business procedures to further enhance India’s global competitiveness and attract greater investment,” President of the USIBC, Ambassador Atul Keshap, said. The USIBC represents hundreds of top global companies operating across the United States, India, and the Indo-Pacific.
“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. 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,” he added.
The business council also welcomed the plan to set up a high-level committee for regulatory reforms but urged a quick movement to identify and remove regulations detrimental to business. The organization lauded the cut in taxes for India’s middle class “as the move will help boost consumption, savings, and investments”.
“A balanced and transparent trade environment is vital to deepening U.S.-India economic ties. In line with President Donald Trump’s emphasis on fair and reciprocal trade, India can consider bolder steps to address structural bottlenecks and foster a more predictable policy environment that instills investor confidence and promotes long-term strategic partnerships. In this regard, the government’s recognition of critical minerals as a strategic asset, along with a National Critical Minerals Mission and an allocation of ₹450 crore, for the forthcoming financial year is a small step in the right direction, but further significant efforts are needed to create a truly self-reliant supply chain,” Keshap added.
“India’s commitment to energy security is commendable, particularly the announcement of a Nuclear Energy Mission for Small Modular Reactors (SMRs) with an outlay of ₹20,000 crore. However, its long-term success will depend on streamlined regulatory approvals and a clear roadmap for private-sector engagement. Likewise, the National Manufacturing Mission, with its focus on high-value sectors such as solar PV cells, EV batteries, motors and controllers, electrolyzers, wind turbines, and high-voltage transmission equipment, signals progress but requires greater policy certainty and ease of doing business to attract the necessary investment and technology partnerships,” he said.
Keshap also warned that with bold moves, India might lag in the technology sector. “USIBC embraces the government’s innovation push via Deep Tech Fund of Funds and efforts to strengthen artificial intelligence (AI), semiconductors, and advanced computing – all areas of deepening bilateral ties. We also welcome the creation of a geospatial mission, a segment that aligns with core Indian talent and capabilities, and an area of potential collaboration with the United States, a global leader in geospatial data creation, analysis, and use. However, bold, concrete measures are still needed to ease regulations and compliance costs in the digital economy that will unleash the potential of private investment, drive competition, lower barriers to entry, and promote the creative economy. Without action, India risks lagging in the global strategic technology race.”
On foreign investments, the USIBC ambassador added, “Similarly, while the proposed increase in FDI limits for the insurance sector from 74% to 100% is promising, review of guardrails and conditionalities associated with foreign investments in the insurance sector will help to maximize investor interest in this sector. The focus on manufacturing, logistics, and supply chain modernization is crucial for India’s global integration. The launch of BharatTradeNet and the transformation of India Post into a major logistics player is praiseworthy.”
Though USIBC welcomed the exemption of 36 lifesaving drugs from basic customs duty, along with concessional duty on six more to improve access to imported drugs, it urged for some other improvements. “While the Customs duty waiver is welcome, deeper structural reforms are needed to address the broader challenges of access, affordability, and innovation. While initiatives like cancer centers and R&D funding are positive, they don’t address deeper issues in regulatory inefficiency, pricing, and transparency. USIBC is actively engaging with stakeholders to identify key pain points affecting businesses in the U.S.-India corridor and provide informed recommendations that will help both governments enhance commercial flows in both directions.”
