Dr Prem Garg, National President of the Indian Rice Exporters Federation (IREF), called the Union Budget 2026, presented by Finance Minister Nirmala Sitharaman on February 1, a starting point for broader reforms. He noted that its unusually brief duration limited detailed sector-wise discussions.
Union Budget 2026 Among the Shortest, Markets React to Phased Reforms
Dr Prem Garg observed that this was the Finance Minister’s ninth budget and among the shortest in recent years, lasting roughly an hour compared to the typical 1.5 hours or more. “Due to the concise presentation, several sectors and schemes could not be addressed in detail. Some previously announced reforms, including benefits of up to ₹50 lakh, were mentioned but not elaborated. We expect greater clarity and expansion in the months ahead,” he said.
Commenting on market reactions, Dr Garg noted that the stock market initially dropped nearly 2,500 points but later recovered around 1,000 points. He attributed the volatility to the government’s gradual approach to reforms. “The government seems to be adopting a phased reform strategy, introducing changes incrementally rather than announcing everything in the budget. This allows markets and industries time to adjust,” he said, expressing optimism about further market recovery.
India do rice exports with nearly 172 countries
Focusing on rice exports, Dr Garg stated that IREF has recommended increased export incentives to the Finance Ministry, particularly in shipping subsidies. Currently, rice exporters receive a 1% subsidy, which the federation has proposed raising to 3%. “India exports rice to nearly 172 countries. Enhanced subsidies could boost export growth from the current 40% to nearly 60%, significantly benefiting Indian exporters, especially MSMEs operating on tight margins,” he explained.
Dr Garg also highlighted ongoing banking challenges faced by MSMEs and small exporters. He pointed out that restrictive procedures, high compliance burdens, and steep charges for Letter of Credit (LC) transactions continue to constrain growth. “Banks charge around 20 to 30 paise per rupee on LC payments, which is highly burdensome for small exporters and startups. We have suggested capping these charges at 2 paise per rupee and standardising them for all exporters, regardless of size,” he said.
Emphasizing equitable treatment, Dr Garg added that benefits provided to large exporters should also be extended to small and medium exporters and startups. “Equal access to financial and policy support will remove barriers and enable smaller players to compete effectively, strengthening India’s overall export ecosystem,” he said.
Looking Ahead
Dr Garg mentioned that IREF plans to formally approach the Finance Ministry, the Government of India, and the Prime Minister with additional recommendations not covered in the current budget. Highlighting India’s status as the world’s third-largest economy, he stated, “If India is to achieve the Prime Minister’s vision of becoming the number one economy by 2047, continuous reforms and regular policy support are essential. This budget should be viewed as the foundation, not the final step.” On agriculture, Dr Garg acknowledged positive provisions in the budget but noted that there is significant scope for further reforms and incentives. “Agriculture and agri-exports have enormous potential. We are hopeful that the government will soon announce more targeted reforms to support farmers, exporters, and the broader agricultural economy,” he concluded.