“The Union Budget reflects a calibrated approach. It has tried to balance long-term measures for emerging sectors with targeted support for industries navigating a more volatile global trade environment. The emphasis on data centres, healthcare, tourism, education, semiconductors and critical minerals signals the government’s intent to build future-facing economic engines, while near-term measures such as customs duty rationalisation and greater flexibility for SEZ occupiers provide immediate relief to manufacturing and export-led businesses.
The Budget also places growing emphasis on the development of tier-II and III cities, creating an additional growth lever for the real estate sector alongside tier 1 markets, which continue to anchor activity across asset classes. As capacity tightens in select Tier I locations, occupiers, particularly GCCs and start-ups, are evaluating Tier II cities, supported by access to emerging talent pools, relatively lower real estate costs, improving infrastructure and a better quality-of-life proposition.
Hospitality is another sector that could see a boost with the proposed development of new tourism clusters centered on spiritual, cultural, heritage and medical tourism. With domestic and international tourist inflows already on a strong footing, efforts to develop new tourism circuits could unlock significant opportunities across the hospitality and allied real estate segments.
The proposal to pool government real estate and land holdings through the use of instruments such as REITs, is also an interesting one to look forward to. There are large tracts of land and real estate held in prime locations across metropolitan cities which could get potentially unlocked through this route.
The announcement of tax holidays and safe-harbour provisions for data centres is particularly significant for India, which remains a structurally under-penetrated market relative to its digital consumption. While these measures will incentivise global hyperscalers and accelerate capacity build-out, sustained growth will depend on parallel progress in power availability, water security and infrastructure readiness. Taken together, these measures reflect a pragmatic approach that supports the real estate sector by strengthening the structural drivers that underpin long-term demand and capital formation.”
