Budget 2025: How it impacts sectors

Finance Minister Nirmala Sitharaman unveiled Budget 2025 today, outlining key policy shifts that will shape India's business landscape. From infrastructure and manufacturing incentives to import duty revisions and FDI reforms, this budget sets the stage for industry growth and investment.

Here's a sector-wise breakdown of the biggest announcements and their potential impact on businesses:

1) Capital expenditure boost

Capex outlay for FY26 increased by 17 per cent to Rs 15.5 lakh crore, ensuring continued infrastructure growth.

The impact: The higher spending will drive economic activity across multiple industries, including steel, cement, and construction.

2) Insurance

Foreign direct investment (FDI) limit in insurance has been raised from 74 per cent to 100 per cent

The impact: Higher FDI flows is expected to lead to increased competition from global players with deeper pockets. This will also expand the product basket for consumers. As a result, domestic insurers could face pressure.

Also read | Union Budget 2025: Why are SBI Life, HDFC Life and other private insurers in the red?

3) Energy and sustainability

Nuclear energy expansion was a special focus. A target of 100 GW capacity by 2047, with private sector participation, has been laid out.

The impact: Companies that are associated in the nuclear energy production supply chain will benefit such as graphite manufacturers.

4) Customs duty changes

Critical minerals and raw materials

Basic customs duty exemption extended to cobalt powder, lithium-ion battery waste, and key minerals to support domestic industries.

The impact: Encourages domestic processing of critical minerals, reducing reliance on imports.

Electronics

Import duty raised from 10 per cent to 20 per cent on interactive flat panel displays to support local manufacturing.

Reduced to 5 per cent on open cells for LED/LCD TVs to encourage domestic assembly.

Reduced to zero from 2.5 per cent on mobile components (PCBA, camera modules, connectors, etc).

28 capital goods for mobile phone batteries exempted.

The impact: With electronic components getting cheaper, this essentially reduces the cost of electronic items.

Shipbuilding

Exemption on basic customs duty for shipbuilding materials extended for 10 more years.

The impact: Shipbuilding companies will continue to enjoy lower raw material costs.

EVs and battery manufacturing

35 capital goods for EV battery production exempted from import duty.

Import duty reduced to zero from 5 per cent on lithium-ion battery waste.

The impact: EV component to see a reduction.

Automobiles

For two-wheelers with an engine capacity below 1600 CC, the export duty on fully assembled units has been reduced from 50 per cent to 40 per cent, from 25 per cent to 20 per cent on partially assembled units, and from 15 per cent to 10 per cent on completely disassembled units.

The impact: Makes two-wheelers exports cheaper, benefitting the manufacturers. This also boosts domestic assembly and reduces reliance on fully built imported vehicles.

Phosphoric acid

Import duty reduced from 20 per cent to 7.5 per cent.

The impact: Phosphoric acid, being a key raw material for non-urea fertilisers, could lead to higher margins for their producers.

Solar cells and modules

Reduced from 25 per cent and 40 per cent to 20 per cent

The impact: Solar power installation could get cheaper and lead to higher adoption.

Also read:

How Budget 2025 impacts your money next financial year

Budget 2025 tax cut sparks rally in Zomato, DMart, other consumer stocks

Railway stocks sink as Budget 2025 lacks big-ticket reforms