The Union budget for FY27 has squarely addressed the challenges faced by Indian businesses due to higher tariffs and other global challenges, finance minister Nirmala Sitharaman told the Parliament on Wednesday, enumerating specific budget measures and countering charges made by Opposition leader Rahul Gandhi that the budget acknowledged these challenges but failed to tackle them.
Prime Minister Narendra Modi will only speak and act in the interest of the nation, Sitharaman stated, countering Gandhi’s charge that the government surrendered the country’s interest in the trade deal with the US.
Sitharaman also highlighted a 2013 trade facilitation agreement at the WTO Ministerial Conference in Bali, and a decision on public stockholding of food grains signed during the Congress-led administration, saying the National Democratic Alliance government reversed it in the interest of farmers.
Replying to the Lok Sabha debate on the Union budget, Sitharaman explained how its proposals sought to insulate the Indian economy from global headwinds while also improving business competitiveness and creating more jobs. Units in special economic zones, affected by the US tariff increase, have been allowed to sell in the domestic tariff area, the minister said, quoting a budget proposal.
Opposition flags gaps
Earlier in the day, opposition leader Gandhi had said the budget acknowledged the challenges identified the Economic Survey for 2025-26, but did not address them. Gandhi also expressed concern that Indians’ data would become a valuable resource for the US in its competition with China.
“I want to tell that we are incentivizing setting up of cloud and data centres in India, so that the data is stored here and our youth gets employment opportunities. The India AI Mission has a dedicated allocation of ₹1,000 crore for 2026-27,” Sitharaman told the House.
Food, energy security and growth
The minister also said budget has made provisions for food, fuel and fertilizer security. “The budget has allocated ₹2.27 lakh crore allocated for food subsidy. We are giving free food to 80 crore people,” Sitharaman said.
Through the ministry of food processing, Rs. 4064 crore has been allocated for setting up food processing industry, the minister said, adding that food inflation is below 2% now.
Sitharaman also said the government has the resources to deal with any unanticipated challenges, as well as the weaponization of finance and technology.
For energy security and to insulate India from the weaponization of critical minerals, the government has offered customs duty exemption to the import of capital goods used for processing critical minerals in the country, Sitharaman said. The budget also proposed extending existing basic customs duty exemption on imports of goods required for nuclear power projects till 2035.
Rahul Gandhi had said the Union budget recognised that the world faces intensifying conflicts and that energy, finance and dollar were getting weaponized, but alleged there was nothing in the budget that address these issues.
Gandhi said AI will disrupt India’s IT industry, posing employment risks to software engineers. He also questioned the India-US trade deal announced earlier this month, saying India lost out on the deal. The average tariff Indian goods faced in the US has gone up from 3% to 18% under the deal, while for US goods, it has come down to zero, Gandhi said. India’s textile industry will be affected because of the US lowering duty to zero on some textiles from Bangladesh, he said.
N.K. Premachandran of Revolutionary Socialist Party sought an assurance from the finance minister that the expenditure and revenue proposals in the budget will accelerate growth at least during the term of the current government, that is, up to 2029.
Sitharaman said the budget focused on new-age sectors like biopharma as well as labour-intensive sectors, while also doubling down on capital expenditure, a force multiplier, which will enable India’s ascent to a developed country.