Ahead of the Union Budget 2026-27, industry leaders and development experts are calling for targeted support to accelerate India’s bio-economy, strengthen circular materials, build climate-resilient agriculture for smallholders and upgrade dairy infrastructure. Focused fiscal stimulus, R&D support and long-term investment are considered important for sustainable development.
As India prepares for the Union Budget 2026-27, leaders from the bio-manufacturing, agricultural development and dairy processing industries are urging the government to move beyond incremental measures and provide targeted fiscal and policy support for sustainable growth. With rising climate pressures and pressure on rural incomes, stakeholders say the upcoming Budget could be crucial in shaping India’s transition to a resilient, circular and bio-based economy.
The bioeconomy and circular materials sector in particular is being seen as an underserved opportunity. India generates more than 500 million tonnes of crop waste every year, most of which is burnt, worsening air pollution and greenhouse gas emissions. Converting this agricultural residue into value-added biomaterials can simultaneously address environmental challenges, increase rural incomes, and reduce dependence on fossil-based materials.
Mahadev Chikkanna, founder and CEO of MYNUSCO, said the upcoming budget should focus more on bio-economy innovation and sustainable manufacturing. “While support to startups and MSMEs will continue in Budget 2025-26, targeted fiscal incentives for circular materials and bio-manufacturing remain limited,” he said. For Budget 2026, he called for R&D tax credits for sustainable materials, export incentives for bio-based products and policy support to scale up bio-manufacturing infrastructure. According to him, such measures will help India decisively shift from a linear to a circular materials economy, while positioning the country as a global hub for climate-friendly manufacturing.
From a development perspective, experts emphasize that any sustainable development agenda must have smallholder farmers at its core. Crispino Lobo, co-founder and managing trustee of the Watershed Organization Trust (WOTR), pointed out that farmers cultivating less than two hectares are the backbone of India’s food system, but face extreme climate and market risks. He stressed that Budget 2026 should focus on long-term resilience rather than short-term relief.
Lobo said investments in climate-resilient agriculture, sustainable water security, precision agriculture technologies and dynamic weather-based advice tailored to farming conditions are now essential. Strengthening post-harvest infrastructure, local value chains, institutional credit, crop insurance and extension services will not only reduce losses but also stabilize farm incomes in an era of climate uncertainty.
The dairy sector, another important pillar of rural livelihoods, is also looking to Budget 2026 for structural support. Dr. K., Whole Time Director and CEO, Milky Mist Dairy Food Limited. Ratnam described dairy as the center of India’s food security and rural economy. He welcomed the government’s continued GST support, but highlighted the need to further rationalize taxes on key inputs such as packaging, refrigeration equipment, animal feed and veterinary services.
Dr Ratnam underlined that strengthening cold-chain infrastructure through higher capital subsidies, interest subvention and easier access to long-term credit is important to reduce milk wastage and improve milk quality, especially in the hinterland. He also called for support for automation, value-added dairy products and sustainability initiatives, as well as targeted incentives covering feed development, animal health, animal insurance and logistics.
