Budget 2026 Industry Reactions: Markets Tumble, IT, Manufacturing, Healthcare & Infrastructure

Industry leaders welcomed Budget 2026 as a blueprint for long-term growth. The government focused on infrastructure, manufacturing, technology, and strategic sectors. Corporate voices called it a “Viksit Bharat” roadmap. Investments in high-tech manufacturing, healthcare, and renewables are expected to rise. Market reaction was immediate, with a sharp fall in equities due to the Securities Transaction Tax hike.

Market & Financial Services

The stock market fell sharply after the budget. Sensex plunged 1,575 points, and Nifty dropped 522 points in the special trading session. The primary reason was the STT hike on futures and options, which made trading costlier. Shares of brokers like BSE Ltd and Angel One fell over 13 percent. Buyback taxation as capital gains also spooked investors. Banking sectors welcomed the announcement of a high-level committee to review readiness for the next growth phase.

IT & Technology Boost

The IT sector received major relief through regulatory simplification. Software development, KPO, and R&D were unified under “Information Technology Services.” Safe Harbour rules were expanded to 15.5 percent margin, and eligibility thresholds rose from ₹300 crore to ₹2,000 crore. This reduces tax litigation significantly. Data centres hosting foreign cloud services will enjoy tax holidays until 2047, encouraging investment in digital infrastructure.

Manufacturing & Strategic Sectors

Manufacturing leaders praised the focus on frontier sectors. The India Semiconductor Mission 2.0 received ₹40,000 crore for electronics production. Biopharma SHAKTI with ₹10,000 crore aims to make India a global hub for biologics. Rare Earth Corridors in Odisha, Kerala, Andhra Pradesh, and Tamil Nadu will secure critical mineral supply chains, supporting strategic independence in technology and defense.

Healthcare & Renewables

Healthcare sector reacted positively. Hospital stocks like Max Healthcare and Medanta rose as the budget proposed five regional medical tourism hubs through PPPs. Renewable industries welcomed customs duty exemptions on lithium-ion cells and solar glass production. Experts highlighted the need to focus on infrastructure stability such as grids and logistics to fully utilize these incentives.

Real Estate & Infrastructure

Real estate firms applauded acceleration of CPSE asset monetisation via REITs. Urban growth plans in Tier-2 and Tier-3 cities are expected to increase housing demand. Connectivity improvements, including the Mumbai-Pune High-Speed Rail, were highlighted as crucial for regional development. Asset monetisation and urban infrastructure investment were seen as strong boosters for long-term growth.

Market Volatility Post Budget

Despite sectoral positivity, equity markets reacted to higher STT and buyback taxes. Futures and options traders faced increased costs, leading to aggressive selling. Heavyweight stocks also fell, spreading risk across the broader market. Small-cap and mid-cap indices declined around 2–3 percent. Analysts advised defensive allocations and focus on sectors with structural growth.

Investor Outlook

Long-term themes in infrastructure, IT, semiconductors, healthcare, and renewables remain strong. Traders need to account for increased costs in derivatives. Experts suggest remaining selective, focusing on quality sectors, and maintaining diversified portfolios. Government focus on strategic sectors and high-tech manufacturing offers confidence for long-term investment.

Final Takeaway

Budget 2026 provides a positive framework for structural growth across industries, from IT and healthcare to semiconductors and renewables. Market volatility reflects short-term reactions, especially from STT and buyback taxation. Long-term, investors may benefit from strategic initiatives and focused sector growth, making careful planning essential for navigating post-Budget turbulence.