Jossy Sebastian, Country General Manager for YCH India, believes Budget 2026 presents a significant opportunity to accelerate India's infrastructure-led growth strategy through targeted logistics investments. Speaking in an interview with Mint, Sebastian emphasised that as supply chains become increasingly central to manufacturing, exports, and consumption, strategic budget allocation can improve operational efficiency, create employment opportunities, and enhance India's global competitiveness.

Infrastructure Investment Priorities

Sebastian outlined several key areas where Budget 2026 can make a transformative impact on logistics infrastructure. He advocates for scaling up investment in port connectivity, dedicated freight corridors, and export-oriented logistics parks positioned near production clusters. The logistics executive stressed that strengthening cold chain infrastructure and specialised warehousing facilities is particularly critical for sectors including electronics, pharmaceuticals, and agricultural exports.

Digital Transformation and Process Simplification

The YCH India executive highlighted the importance of customs procedure simplification through deeper digitisation and risk-based inspections to reduce dwell times and improve turnaround efficiency at borders. Sebastian noted that continued government support for interest-free loans to states can help accelerate last-mile infrastructure development around industrial zones and ports, creating a more integrated logistics ecosystem.

Sector Expectations from Budget 2026

The logistics and supply chain sector anticipates a budget that builds on recent momentum and elevates infrastructure-led growth to the next level. Key expectations include a meaningful increase in overall infrastructure allocation with strong focus on multimodal connectivity, urban logistics, and comprehensive warehousing ecosystems.

Technology-Enabled Logistics Networks

Sebastian emphasised that India's logistics transformation will accelerate through stronger alignment between infrastructure creation and digital enablement. While continued investment in highways, rail freight corridors, ports, and inland waterways remains essential, he believes the next significant advancement will emerge from seamlessly connecting these assets through technology. Policy support for multimodal logistics parks, standardised digital documentation, and interoperable platforms such as the Unified Logistics Interface Platform can significantly reduce operational friction across warehousing, freight, and last-mile delivery.

Cost Efficiency and Global Competitiveness

Addressing rising logistics costs, Sebastian outlined several fiscal and regulatory interventions that could improve cost efficiency for Indian supply chain players. These include rationalising fuel taxes, offering incentives for energy-efficient fleets, and expanding access to green financing to manage long-term operating costs. On the regulatory front, he advocates for faster clearances, harmonised state-level compliances, and wider adoption of single-window digital systems to significantly reduce delays and indirect expenses.

Sebastian concluded that as India aims to compete globally, improving logistics efficiency will be equally important as manufacturing competitiveness, particularly for time-sensitive and export-oriented industries. A focused approach to cross-border logistics efficiency will not only support exporters but also enhance India's credibility as a long-term manufacturing and supply chain hub.

Sunny Agrawal, Head of Fundamental Research at SBI Securities, anticipates that Budget 2026 will emphasize fiscal consolidation, capex-driven growth, and ease of doing business initiatives. His outlook suggests the upcoming budget for financial year 2026-27 could deliver significant infrastructure spending while maintaining fiscal discipline. However, he expects a post-budget market rally only if the government introduces measures to attract capital from foreign institutional investors and domestic investors.

Key Budget Expectations

Agrawal outlines three primary expectations for Budget 2026 amid the challenging geopolitical environment:

The government may increase capital expenditure spending by 10-12% for FY27 based on the revised target of FY26. For FY27, the annual capex spend target can exceed the ₹12 trillion mark, with any significant jump from this threshold potentially acting as a major economic boost. The budget is also expected to continue the fiscal deficit glide path as a percentage of GDP, which was pegged at 4.4% for FY26.

Market Positioning and Investment Strategy

Agrawal notes that the Union Budget's importance as the sole window for reform measures has diminished over recent years, with reforms becoming a continuous process. Budget documents now primarily help investors understand the government's focus areas for the next 12 months. Post-budget rally prospects depend on multiple factors including December quarter earnings season, whether the budget meets market expectations, and resolution of headwinds like Indo-US trade deals.

Sectoral Outlook and Opportunities

Several sectors are positioned to benefit in the run-up to Budget 2026:

Strong December Quarter Performance Expected:

• Non-Banking Financial Companies (NBFCs)
• Public Sector Banks
• Mid-sized private banks
• Automobile and auto ancillary companies
• Metals and Oil Marketing Companies
• Consumer discretionary sector

Budget-Sensitive Sectors:

• Real Estate and Housing Finance
• Railways and Defence
• Infrastructure-dependent industries

Fiscal Targets and Tax Policy

Regarding personal income tax relief, Agrawal expects minor benefits rather than major reforms. After significant tax breaks in the previous Union Budget, this budget may focus on making the new tax regime incrementally attractive through measures like increased standard deduction limits. The FY26 fiscal deficit target of 4.4% of GDP is likely achievable despite potential shortfalls in indirect tax collection, which will be offset through reduced expenditure in select ministries.

For FY27, the government may target a fiscal deficit closer to 4.2-4.4% of GDP with focus on the debt-to-GDP ratio. The IDBI Bank divestment, currently in advanced stages, should boost the FY27 divestment target, though the FY26 target may be missed due to weak market sentiment.