Market participants viewed the budget 2025 as positive for some sectors and negative for others. Investors also believed that the budget would help some sectors grow over the long term, as was evident by the post budget rally in the stocks belonging to the sectors.
This blog highlights the investment opportunities that the 2025 union budget has presented for investors.
Economic Measures
The government has made sure, through the union budget, that India remains an attractive investment opportunity for domestic and foreign investors. For this purpose, the following were introduced:
- The government introduced a capital expenditure plan of ₹11.2 trillion as compared to ₹11.1 trillion in the previous budget. Although lower than market expectations, this is a significant amount to maintain the growth trajectory of the economic landscape.
- For FY26, the government is aiming to maintain a fiscal deficit of 4.4%. This shows the government is focused on ensuring fiscal discipline along with growth.
- The government has allocated ₹10,000 crores for startups and MSMEs to boost business growth in India.
- The government has also introduced plans to lower the government debt to 50% of the GDP by FY31, which currently stands at 57% of the GDP.
These measures make India a good investment avenue. Now, let us take a look at some sectors that can potentially offer a good investment opportunity.
Also Read: The startup saga: Tracing the growth of India’s entrepreneurial landscape
Quick and E-Commerce
The government introduced tax relief in the form of no income taxes for income up to ₹12 lakhs per annum for FY26. This will increase disposable income in the hands of taxpayers.
This move is set to benefit quick commerce players like food delivery companies and other online shopping websites and companies. Because with increased disposable incomes, people will spend more on consumption of goods and services.
People will be able to order more online goods and services, and this can increase the profitability of E-commerce and quick commerce players.
Also read: Income tax calculator: Calculate your taxes (2023-24) online
Renewable Clean Energy
The government has clearly stated in the budget 2025 that it plans to give the renewable energy sector a major push in the upcoming years. The government revealed its plans for developing solar and nuclear energy capabilities in the country.
The government has an aim of producing at least 100GW of nuclear energy in the country by 2047. For this purpose, the government has allocated ₹20,000 crores for the development and research of small modular reactors. Investors should watch out for listed companies that are directly or indirectly involved in this project.
The budget 2025 also allocated ₹1500 crores to the solar power grid segment, reduction of import duties on solar modules from 40% to 20%, and reduction of import duties from 25% to 20%. These moves are aimed at promoting clean solar energy development in the country and could benefit companies involved in the manufacturing of solar panels and solar cells and in the generation of clean electricity.
Also read: The renewable energy industry in India: A game-changer for the environment
Tourism
The government has plans to give a significant boost to the tourism industry. These plans include spending ₹20,000 crores to boost infrastructure and transport connectivity in major tourism hubs. The Ministry of Tourism budget has been increased from ₹850.36 crores to ₹2,541.06 crores.
These moves will benefit companies involved in the hotel and hospitality businesses. This move will also benefit companies involved in logistics and transportation. Over 50 destinations will be developed in partnership with state governments. This move will also help increase job creation.
You may also read: Top 10 Tourism Stocks to Profit from Indian Travel Boom
Aviation
Budget 2025 announced measures to improve air connectivity across the country. The modified UDAAN scheme is focused on improving connectivity to 120 new destinations and carrying 4 crore passengers over the next 10 years.
The Ministry of Civil Aviation has been allocated ₹2,400 crores in the 2025 budget. ₹1,025 crores has been allocated to Air India for servicing its debts. The air connectivity will be specially focused on increasing accessibility to hilly and northeastern regions.
This move can benefit airline companies and infrastructure companies involved in the development of airports in the long term.
You may also like: Top Airline Stocks to Invest in India
Ship Building
The government understands the potential of the shipbuilding industry. This industry can lead to massive job creation and economic growth. India paid $109 billion to foreign operators as sea freight.
With increasing trade, this industry will see a boom, and it is essential to promote the development of the shipbuilding industry in India. The government has announced that it will grant “Infrastructure” status to large vessels, which will help access cheaper infrastructure lending.
The government has also extended custom duty exemption on the import of key raw materials by 10 years to boost raw material availability at cheaper prices. The government also allocated ₹25,000 crore for long-term maritime development financing.
Investors can focus on companies involved in port operations, shipbuilding, and shipping of goods. Companies that provide engineering services and key components will also be beneficiaries of this move.
Also read: Best Shipping Stocks to Invest in India
Insurance
The government understands the importance of the insurance sector. It also recognizes the under penetration of insurance in India. The Indian insurance penetration stands at just 3.7% in 2023-24. This shows the untapped potential of this sector.
For the insurance companies that invest their entire collected premium in India, the government has increased the FDI limit from 74% to 100%. This allocation will help in the development of the insurance sector, and investors can look for opportunities among insurance companies.
Also read: Insurance 101: How to protect yourself and your assets!
Bottomline
Rather than focusing on the stock markets on budget day investors should focus on long term effects of the budget. The budget focused on some other sectors as well as these sectors.
These sectors can witness major growth in the long term. Investors should properly analyze these sectors and should properly find investment opportunities with the least amount of risk. Always remember that the impacts of the budget are seen in the long term, and investors should not expect returns immediately.
