As India heads into Union Budget 2026, expectations across markets and industry remain restrained. After several years of elevated pandemic-era spending, the government is firmly back on a fiscal consolidation path, narrowing the deficit from over 9 per cent of GDP in FY21 to 5.6 per cent in FY24, 5.1 per cent in FY25 (RE), and a budgeted 4.9 per cent in FY26. 

The key investment themes of 2026 are already visible on the horizon, having been formed mainly in the current year.

Their retreat is not episodic or tactical; it reflects a deeper reset in global capital allocation, fund economics, and India’s late-stage opportunity structure.

Budget 2025 reinforced a capital-led growth rulebook, prioritised public capex, manufacturing-linked incentives, and long-term innovation financing. This was supposed to act as a lever to rope in private investment rather than relying on broad fiscal stimulus. 

As the Union Budget 2026 approaches, expectations are building across India’s financial services and startup ecosystem for policy signals that go beyond headline allocations.

India's VC market in 2025 was defined by selective capital, larger cheque sizes, and a clear shift toward profitability, execution depth, and exit visibility.