The Finance Minister has announced a major support initiative for the electronics manufacturing sector in Union Budget 2026, promising a 2% profit margin to electronic manufacturers. This measure represents a significant step towards strengthening India's electronics manufacturing ecosystem.

Key Budget Announcement

The central highlight of the budget proposal includes:

Sector Impact

This announcement is expected to provide direct financial support to electronic manufacturers across the country. The 2% profit margin support mechanism aims to enhance the viability and competitiveness of domestic electronics production.

Policy Framework

The Finance Minister's commitment to providing structured profit margin support demonstrates the government's focus on bolstering the electronics manufacturing sector. This initiative forms part of the broader budgetary measures designed to support key industrial segments and promote domestic manufacturing capabilities.

The Finance Minister has announced a significant proposal for the Indian data centre sector in Union Budget 2026, introducing a 15% safe harbour rate for Indian companies operating data centres. This development marks an important policy initiative aimed at the growing data centre industry in the country.

Safe Harbour Rate Proposal

The proposed measure specifically targets Indian companies engaged in data centre operations. Safe harbour rates typically provide businesses with tax certainty by establishing predetermined acceptable profit margins for transfer pricing compliance, reducing the complexity of documentation and potential disputes with tax authorities.

Industry Impact

This proposal comes at a time when India's data centre sector is experiencing significant growth, driven by increasing digitalization and cloud adoption across various industries. The introduction of a specific safe harbour rate for data centre companies could provide greater regulatory clarity and potentially encourage further investment in the sector.

The 15% rate structure aims to streamline tax compliance for companies operating in this technology-intensive sector, potentially reducing administrative burden and providing more predictable tax outcomes for businesses in the data centre space.