Union Budget 2026 positions aviation and defence as strategic growth engines—combining infrastructure expansion, technological self-reliance, and national capability building. Increased focus on airport modernisation, regional air connectivity, and aviation infrastructure strengthens passenger mobility while supporting cargo, logistics, and tourism growth. Industry leaders have shared their reactions below.
Sahil Mahajan, Partner – Aviation, Airports and Hospitality- PwC India: The growth of India’s aircraft fleet from 800 to 2500 supported by custom duty exemptions for civilian and Maintenance Repair Overhaul ( MRO )parts, considerably boosts domestic MRO capabilities—unlocking investment and strengthening self-reliance.
Aloke Singh, Managing Director, Air India Express: Budget 2026’s emphasis on Viable Gap Funding (VGF)-backed seaplane operations and indigenous manufacturing can strengthen regional and coastal connectivity, catalyse tourism-led development, and bridge infrastructural gaps, thereby aligning with the Viksit Bharat vision
The Union Budget 2026–27 sends a strong and reassuring signal for India’s long-term growth, anchored in fiscal discipline and a sustained push on infrastructure-led development. The continued emphasis on capital expenditure and destination-focused investment provides a solid structural framework for the expansion of tourism and, by extension, the civil aviation sector.
The Budget’s focus on strengthening medical value tourism and destination development is particularly relevant for aviation, as it creates high-frequency, purpose-driven inbound travel, especially from regions such as the Middle East and Southeast Asia. At the same time, the emphasis on developing heritage, archaeological, and eco-tourism destinations across multiple states will stimulate demand for air connectivity to Tier-2 and Tier-3 cities, supporting the next phase of domestic aviation growth.Importantly, the parallel focus on skilling and professionalising the hospitality and tourism workforce addresses the capacity and service-quality requirements needed to sustain this growth. Taken together, these measures create an ecosystem in which airlines like Air India Express are well positioned to play a meaningful role.
Mr. Ankit Mehta – CEO of ideaForge Technology Pvt. Ltd: We congratulate the Finance Minister for presenting a pragmatic Budget that continues to prioritise Defence capital outlay while strengthening India’s domestic manufacturing ecosystem, electronics base, and semiconductor capabilities. Proposed measures such as the India Semiconductor Mission 2.0, the expanded Electronics Components Manufacturing Scheme, and support for advanced technology R&D signal a strong focus on building strategic supply chains and indigenous high-tech capability.
Mr. Aravind Melligeri, Executive Chairman & CEO, Aequs Limited: With Defence capital expenditure in FY27 rising to ₹2.19 Lakh Crore, almost 22% higher than last year, the government has signalled a strong commitment to modernisation and long-term capability building. This provides clear guidance for frontier technologies and positions ideaForge to continue leading in indigenous UAVs, electronic warfare systems, and advanced aerial platforms, while contributing to India’s vision of a Viksit Bharat and a forward-moving Bharat
The decision to allow eligible SEZ manufacturing units to sell into the Domestic Tariff Area at concessional duty is a significant boost for companies that have created large-scale capacities in both the consumer and aerospace & defence sectors. At a time of global demand volatility and trade disruptions, this pragmatic measure will help improve capacity utilization, support operating efficiencies, and provide greater flexibility for capital-intensive manufacturing operations. For strategic sectors such as Aerospace and Defence, a more permanent framework for domestic sales from SEZs, would further strengthen India’s ability to meet growing indigenous demand while also becoming globally competitive.
More broadly, the Budget’s sustained focus on manufacturing-led growth, infrastructure development, and global competitiveness reinforces long-term policy clarity and investor confidence. Initiatives such as India Semiconductor Mission 2.0, the expanded Electronics Components Manufacturing Scheme, customs duty exemptions for aircraft components and MRO-related raw materials, and the substantial increase in defence spending, with indications of up to a 20% hike, collectively support deeper localization, modernization, and private sector participation. Together, these measures will create a stable and enabling framework for companies to scale investments, deepen capabilities, and integrate India more firmly into global manufacturing value chains.
