Kerala Industry Bodies Applaud Union Budget Development Proposals

On February 1, 2026, Finance Minister Nirmala Sitharaman unveiled the Union Budget for the fiscal year 2026-27, which has received a warm reception from various industry forums in Kerala. Officials expressed optimism over proposals they believe will foster development in crucial sectors. The Federation of Indian Chambers of Commerce and Industry (FICCI) Kerala State Council highlighted that the Budget emphasises comprehensive growth across vital industries.

FICCI Kerala chairman, V.P. Nandakumar, remarked on the noteworthy initiatives mentioned in the Budget, including projects aimed at processing critical minerals, establishing special chemical corridors, and developing schemes for the manufacturing of electronic components as well as textile parks.

Similarly, the Indian Chamber of Commerce & Industry, Cochin (ICCI), labelled the budget as growth-oriented and reform-focused, aligning with long-term development goals. ICCI Cochin-2 president, Rajkumar Gupta, articulated optimism regarding the substantial allocation of funds. The Union Budget designates ₹10,000 crore for bio-pharma, ₹40,000 crore for electronic component manufacturing, and ₹10,000 crore designated for small and medium enterprises (SMEs). He noted that these initiatives, along with sustained emphasis on semiconductors and strategic rare earth magnet corridors, are expected to greatly benefit Kerala.

Cochin Chamber of Commerce & Industry president, Vinodini Sukumar, also expressed approval of the Budget's focus on manufacturing and the IT sector. She stated, “The establishment of the rare earth corridor, which is also included in the State Budget, sends a positive signal.” Moreover, she commended the support for the export of Ayurveda medicines, which have gained global recognition.

Vivek Krishna Govind, president of TiE Kerala, discussed the government's effort to simplify the tax framework through measures that aim to reduce compliance burdens and litigation. He pointed out that the Budget includes provisions regarding foreign asset disclosures for smaller taxpayers and the decriminalisation of procedural lapses, which he described as beneficial reforms. Notably, he acknowledged that the Budget also significantly overhauls the customs framework, streamlining procedures and rationalising provisions across various sectors.

However, not all reactions to the Budget have been positive. The Kerala Matsya Thozhilali Aikya Vedi, representing the fishing community, described the Budget as disappointing. They stated that the proposals compromise the fishing sector, aligning with recent government notifications which permit fishing ventures closer to shorelines, potentially jeopardising small and traditional fisheries. President Charles George cautioned, “Since fish stock is diminishing in the deep sea, vessels will encroach upon coastal waters, disrupting the livelihoods of small-scale fishermen.”

As discussions continue surrounding the implications of the Union Budget, industry leaders in Kerala are hopeful that the proposed measures will create significant opportunities for economic advancement and job creation in the region.