Budegt 2025: Key Sectors To Grow in 2025

Finance Minister Nirmala Sitharaman's Union Budget 2025 delivers substantial tax relief to the middle class while introducing strategic measures to propel various industries. From electric vehicles to shipping, insurance, and footwear, multiple sectors stand to gain from her proposals. Here’s a closer look at the key beneficiaries:

Footwear & Leather

To enhance productivity, quality, and global competitiveness, the government will introduce a Focus Product Scheme for the footwear and leather industry. The initiative will support design capability, component manufacturing, and machinery for producing non-leather footwear while also boosting leather footwear and related products. This scheme is expected to:

Generate employment for 22 lakh individuals

Achieve a turnover of ₹4 lakh crore

Facilitate exports worth over ₹1.1 lakh crore

Additionally, Sitharaman proposed:

Customs duty exemption on Wet Blue leather to support domestic value addition and employment.

Removal of 20% export duty on crust leather to benefit small-scale tanners.

Toy Manufacturing

Building on the National Action Plan for Toys, the government aims to position India as a global toy manufacturing hub. The new scheme will focus on:

Cluster development and skill enhancement

Strengthening the manufacturing ecosystem

Promoting high-quality, innovative, and sustainable toys under the ‘Made in India’ brand

Clean Tech & Renewable Energy

The budget prioritizes Clean Tech manufacturing to drive domestic production and job creation. Key highlights include:

Customs duty exemptions on critical minerals such as cobalt powder, lithium-ion battery scrap, lead, and zinc to ensure raw material availability.

Expansion of capital goods exemptions for EV and mobile phone battery manufacturing to accelerate domestic lithium-ion battery production.

Investment in solar PV cells, wind turbines, electrolyzers, and very high voltage transmission equipment to strengthen India's green energy infrastructure.

Water Infrastructure

Since 2019, 15 crore rural households (80% of India's rural population) have gained access to potable tap water. To achieve 100% coverage, the Jal Jeevan Mission will be extended until 2028, with an increased budget allocation. Key focus areas include:

Infrastructure quality improvement

Operations and maintenance through community participation (Jan Bhagidhari)

State/UT-specific MoUs to ensure sustainable water service delivery

Power Sector Reforms

The government plans to strengthen the electricity sector by:

Incentivizing electricity distribution reforms to enhance financial health and capacity

Supporting intra-state transmission augmentation to improve power reliability

Allowing states additional borrowing (0.5% of GSDP) contingent on successful implementation of reforms

Nuclear Energy Expansion

Aiming for 100 GW of nuclear energy capacity by 2047, the government will:

Introduce amendments to the Atomic Energy Act and the Civil Liability for Nuclear Damage Act to facilitate private-sector participation.

Launch a Nuclear Energy Mission with an outlay of ₹20,000 crore to drive R&D in Small Modular Reactors (SMRs), with at least five indigenous SMRs expected to be operational by 2033.

Shipbuilding & Maritime Sector

To strengthen India's shipbuilding industry, the government will:

Revamp the Shipbuilding Financial Assistance Policy to mitigate cost disadvantages.

Introduce Credit Notes for shipbreaking to encourage a circular economy.

Facilitate Shipbuilding Clusters to enhance ship categories, infrastructure, and skilling.

Continue customs duty exemptions on raw materials and parts for ship manufacturing and shipbreaking for another 10 years.

Aviation & Regional Connectivity

The success of the UDAN scheme—which has enabled 1.5 crore middle-class travelers, connected 88 airports, and operationalized 619 routes—has inspired a modified UDAN scheme to:

Expand connectivity to 120 new destinations

Facilitate 4 crore passengers over the next 10 years

Improve infrastructure for helipads and smaller airports in remote and aspirational districts

Affordable Housing

The SWAMIH Fund has already delivered 50,000 housing units in stressed projects. The budget proposes:

Completing 40,000 more units in 2025

Launching SWAMIH Fund 2, a ₹15,000 crore blended finance initiative supported by the government, banks, and private investors, aiming to expedite another one lakh unit completions

Tourism Infrastructure

A challenge-mode initiative will develop India’s top 50 tourist destinations, with states required to provide land for infrastructure. Hotels in these areas will be included in the Harmonized List of Infrastructure (HML) to facilitate investment.

Insurance Sector Liberalization

To boost insurance penetration, the government will:

Increase the FDI limit from 74% to 100% for companies investing their entire premium revenue in India.

Review and simplify existing FDI guardrails and regulatory conditions.

Textile Industry Support

To encourage domestic production of technical textiles such as agro-textiles and medical textiles, Sitharaman proposes:

Adding two more shuttle-less looms to the list of fully exempted textile machinery.

Adjusting the Basic Customs Duty (BCD) rate on knitted fabrics from “10% or 20%” to “20% or ₹115 per kg, whichever is higher.”

Electronics & Manufacturing Boost

In alignment with the Make in India policy, Sitharaman proposes:

Raising the BCD on Interactive Flat Panel Displays (IFPDs) from 10% to 20% to support domestic manufacturing.

Reducing the BCD on Open Cell parts for LCD/LED TVs from 5% to 2.5% to further boost production.

Telecom Reforms

To streamline tariff classification and avoid disputes, the BCD on Carrier Grade Ethernet Switches will be reduced from 20% to 10%, aligning it with Non-Carrier Grade Ethernet Switches.