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India Budget 2026: Real Estate Poised for Growth
24 Jan
Summary
- Real estate sector is a primary growth catalyst for India's economy.
- Capital inflows reached a record USD 14.3 billion in 2025.
- Budget 2026 policy must sustain real estate's current momentum.
India's real estate sector has evolved into a key economic growth driver, bolstered by structural reforms like RERA and GST. Capital inflows in 2025 reached an unprecedented USD 14.3 billion, with both office and retail segments experiencing record absorption. The upcoming Union Budget 2026-27 presents an opportunity to refine policy frameworks.
The office market, particularly Global Capability Centres (GCCs), is a cornerstone of growth. These centers have become innovation hubs, accounting for 35-40% of office leasing. To further incentivize their expansion, a concessional corporate tax rate of 15% for new GCCs is proposed.
Affordable housing faces challenges due to rising costs. Suggestions include redefining 'affordable' units to INR 75 lakh in tier-I cities and reintroducing the credit-linked subsidy scheme. Rationalizing GST on construction inputs is also recommended.
The data centre sector, now a core digital economy driver, is expanding rapidly. Targeted fiscal measures, like customs duty rationalization on GPUs and incentives for energy efficiency, are suggested to support its growth.
Indian REITs are maturing into mainstream instruments, eligible for equity index inclusion from July 2026. Extending Section 80C eligibility to REIT units would further boost retail investor participation.
The Union Budget 2026 is crucial for solidifying real estate's role in India's economic resilience and accelerating the development of future-ready urban centers.
