India's MSME sector stands at a critical juncture as the country approaches Union Budget 2026. The scale and significance of micro, small, and medium enterprises is no longer debatable, with these businesses now forming the operational core of India's economy.

Current MSME Landscape

The numbers reflect the sector's remarkable growth and transformation. As of September 2025, comprehensive data shows the sector's impressive scale:

This digital transformation represents a fundamental shift in how small businesses manage cash flows, process payments, and interact with the financial system. The progress has created a strong foundation for growth while simultaneously making remaining constraints more visible.

Four Key Budget Priorities

Modernise Credit Guarantee Frameworks

Credit guarantees have proven among the most effective tools for expanding collateral-free lending to MSMEs. By sharing risk with lenders, these frameworks have unlocked credit at scales traditional asset-backed models could not achieve.

As MSMEs become more data-rich and digitally visible, these frameworks require evolution. Key improvements include:

• Expanding coverage limits for growth-stage enterprises
• Simplifying claim settlement processes
• Extending eligibility criteria
• Supporting cashflow-based lending models

A dedicated Budget allocation to expand the MSME credit guarantee corpus, focused on cashflow-based models rather than static balance-sheet assessments, would catalyse the next growth cycle.

Reduce Compliance Friction

While formalisation has delivered clear benefits, it has simultaneously increased compliance burden on smaller businesses. Many micro and small enterprises find managing GST filings, audits, and reporting requirements demands disproportionate time and effort.

Essential reforms include:

• Simplifying compliance thresholds
• Rationalising reporting requirements
• Reducing process duplication
• Advancing unified digital compliance systems

Regulation proportionate to scale encourages businesses to remain formal and grow within the system, strengthening the ecosystem rather than constraining it.

Invest in Financial Literacy

Despite significant government resources committed to supporting MSMEs through multiple schemes and direct benefit transfers, adoption remains uneven. Many entrepreneurs lack awareness of available schemes or understanding of navigation processes.

Dedicated funding for regional outreach, borrower education, and digital onboarding can bridge this gap. When MSMEs understand credit product mechanics, repayment structures, and digital tool benefits, confidence and responsible borrowing behaviour improve significantly.

Strengthen Market Access

Government procurement from MSMEs demonstrates successful outcomes when access frameworks function as intended. The broader challenge lies in ensuring consistent execution across programmes.

Key improvements include:

• Clearer processes and better institutional coordination
• Simplified borrower journeys
• Reduced delays and fragmented processes
• Improved last-mile execution

For MSMEs, predictability matters more than novelty. Reliable credit access, manageable compliance, and consistent support systems enable entrepreneurs to plan, invest, and scale with confidence.

Path Forward

India's MSME ecosystem has demonstrated its capacity to formalise, digitise, and grow at scale when proper foundations exist. Budget 2026 presents an opportunity to shift focus from inclusion to expansion through system-level strengthening rather than incremental additions.

By addressing these four priorities, the Budget can help MSMEs transition from resilience to scale, positioning India's small businesses to become global exporters and national champions.

India's gems and jewellery industry is presenting a comprehensive wish list for Budget 2026-27, seeking targeted policy support to navigate challenges from record-high precious metal prices and global trade uncertainties. With gold and silver trading at unprecedented levels, industry leaders are calling for tax rationalisation, structural reforms, and demand-boosting measures to sustain domestic consumption and strengthen export competitiveness.

Record Price Surge Challenges Consumer Demand

The precious metals market has witnessed extraordinary price movements that have significantly impacted consumer affordability. Gold prices have demonstrated remarkable momentum with sustained rallies across multiple years.

Despite this sharp volatility, consumer demand has remained resilient, though more calibrated, highlighting jewellery's dual role as both emotional purchase and store of value.

GST and Tax Reform Priorities

Industry leaders are emphasising affordability as a critical factor for sustained growth. Suvankar Sen, MD & CEO of Senco Gold, highlights the urgent need for regulated small-ticket EMI options for gold jewellery and a comprehensive review of the current 3% GST rate to reduce consumer burden and encourage formal market participation.

Mangesh Chauhan, Managing Director of Sky Gold & Diamonds, advocates for more aggressive GST streamlining on jewellery, proposing a reduction to around 1% – 1.25% to boost formal sales and widen the tax base. This approach aims to stimulate domestic demand while improving compliance in the organised sector.

Import Duty Rationalisation Demands

The industry is seeking comprehensive import duty reforms to enhance competitiveness and reduce input costs. Key proposals include:

• Review of the current 6% gold import duty
• Rationalisation of import duties on gold, silver, platinum, and coloured gemstones
• Reduction of 5% import duty on cut and polished diamonds to 2.5%
• Lower duties on essential manufacturing inputs

These measures are expected to enhance export competitiveness while supporting local manufacturing capabilities.

Diamond Segment Seeks Balanced Support

The diamond industry is calling for differentiated policy approaches to address sector-specific challenges. Jignesh Mehta, MD and Founder of Divine Solitaires, emphasises that geopolitical uncertainty and price volatility continue to impact the natural diamonds segment, advocating for the proposed duty reduction to boost exports, employment, and local manufacturing.

For the emerging lab-grown diamond segment, Anand Lukhi, Founder & CEO of Lukson, believes Budget 2026-27 should recognise its strategic importance through duty rationalisation on raw materials and equipment, manufacturing incentives, and improved MSME credit access.

Infrastructure and Skill Development Focus

Beyond tax reforms, the industry seeks comprehensive infrastructure and human capital development support:

• Focused vocational training for karigars
• Greater technology adoption initiatives
• Flexibility for SEZ units to serve domestic demand
• Investment in design-led skilling programs
• Infrastructure development in export clusters
• Early rollout of Tourist GST Refund scheme at major airports

Sen particularly emphasises leveraging India's household gold holdings of close to 24,000 tonnes through innovative mobilisation mechanisms to unlock significant long-term economic value.

Strategic Vision for Global Competitiveness

The industry's collective vision focuses on positioning India as a global jewellery and diamond powerhouse through balanced policy support. The emphasis on moving from volume-driven exports to high-value branded jewellery reflects the sector's ambition to climb the value chain and capture premium market segments.

With sustained policy focus on affordability, manufacturing excellence, and export competitiveness, the industry believes these measures can stimulate domestic demand, safeguard employment, and sustain export growth amid external uncertainties in the rapidly evolving global marketplace.