Indian startups seek tax reforms, infrastructure development, and more from Nirmala Sitharaman’s Budget 2025

With Union Budget 2025 on the horizon, stakeholders from across industries are eagerly awaiting reforms and policies aimed at addressing key economic challenges and driving growth. Businesses are hoping for measures to boost investments, improve the ease of doing business, and promote digital transformation. There is also a growing demand for increased spending on infrastructure, healthcare, and education to drive long-term growth.

Startups and MSMEs expect tax relief, simplified compliance, and access to funding, while sustainability-focused sectors are calling for incentives to adopt green practices. Additionally, individuals anticipate higher income tax exemptions and benefits to support consumption and savings. Overall, Budget 2025 is expected to focus on inclusive growth, job creation, and a vision for a robust and self-reliant economy.

Further, Indian taxpayers, particularly the middle class and the corporate sector, are eagerly anticipating tax reforms in Finance Minister Nirmala Sitharaman’s eighth Budget speech on February 1, 2025. Some of their expectations include revised income tax slabs, reduced GST rates, regulatory updates, and announcements on capital expenditure. Amid the current economic climate, the middle class is hoping for much-needed relief.

YourStory gathers insights from various stakeholders ahead of Budget 2025, shedding light on their expectations and priorities.

Ramesh Bafna, CFO, Zepto 

“We expect the upcoming budget to introduce some crucial measures to further uplift the startup segment in India. The tax neutrality on the migration of shareholding from overseas to India (Reverse Flip) will empower startups to consolidate operations and key funding domestically, boosting investment and contributing to economic growth.” 

“Additional relaxations, such as relaxing vesting periods for ESOPs post-flip, harmonising capital gains tax rates for resident investors, and extending the period for carrying forward accumulated losses, will further ease the reverse flip process. Easing GST registration compliance through a proposed Tatkal system will address lengthy wait times for approvals, allowing for faster expansion.”

Sandeep Aggarwal, Founder & CEO of Droom

“As we move closer to the unveiling of Union Budget 2025, at Droom, we would appreciate policies that will give a push to drive India’s digital transformation, especially in the automotive sector. The previous budget announcements have been forward-looking in giving a boost to emerging technologies. And we expect this year’s budget to focus on boosting indigenous capabilities in AI and data science. These are going to be crucial frontiers in making vehicle buying and selling more transparent, affordable, and efficient.” 

“Furthermore, we’d look forward to measures that will bolster the used vehicle market in the country, such as tax rebates from eco-friendly vehicles, simplified GST structure for automatic services, etc. These measures will be critical in empowering platforms like Droom to offer more convenience and invoke more trust amongst our consumers, while contributing in meaningful ways to the nation's economic growth and development.”

Utham Gowda, Founder & CEO of Captain Fresh

“As India charts its path to achieve ₹1 lakh crore in seafood exports annually, the Union Budget 2025-26 is expected to play a pivotal role in driving this ambitious goal. At Captain Fresh, we’ve seen how technology can form the foundation for creating a platform business connecting various nodes across the global supply chain. As digitisation becomes an imminent theme in organizing global supply chains, India can position itself as an exporter of not just seafood but also technologies that transform the value chain. We hope the government will incentivise innovation by fostering collaboration with tech startups in the production ecosystem—both marine & aquaculture—to address critical challenges like scalability, market access, and international quality standards.”

“We expect the budget to emphasise technology integration, infrastructure development, and policy reforms to enable sustainable growth. Strengthening bilateral trade agreements to reduce tariff barriers and prioritising R&D to advance domestic productivity will be crucial for meeting growing global demand.”

Sai Pattabiram, Founder & MD, Zuppa Geo Navigations Pvt Ltd. 

“The demand for secure non-Chinese drones is growing the world over and more so in India . India has the opportunity to leverage its own domestic consumption and global reputation as a trustworthy technology partner built by the IT sector to evolve into a global drone hub. This can only be achieved by India moving deeper into the component level supply chain from the current assembly of imported components level that it is in today.

“Drone cybersecurity is turning out to be an absolute must-have for India in particular and global users in general especially after the often-quoted electronic warfare threats in Ukraine and the Hezbollah pager attack in Lebanon. The government should recognise this huge national as well as global opportunity and support companies involved in component manufacturing, cyber, data security and analysis for drones.

“A Design linked Incentive (DLI) coupled with a PLI that supports use of only Domestically produced components by OEMs will boost the sector in a big way.”

Veerasundar V, Chief Financial Officer, Simplilearn 

“Our expectations for the 2025-2026 budget are strengthening industry-academia collaborations to align courses with market needs and prioritising hybrid learning to ensure accessibility, especially in rural areas. Investments in skilling programs for high-demand fields like AI and IoT are essential to prepare India’s workforce for the modern economy.

“The government should also support mid-career upskilling and promote female entrepreneurship through targeted training and financial support. Additionally, it is crucial to address the gaps in upskilling for India’s Gen Z workforce. Incentivizing businesses to invest in Gen Z skilling, fostering global certifications, and promoting practical learning will ensure this generation is future-ready.”

Yashoraj Tyagi, CEO, CASHe

“The lending sector expects some major changes in the upcoming Union Budget. Increased credit fraud, limited access to customer protection tools and cyber scams have temporarily disrupted the digital lending ecosystem. This year’s budget presents opportunities to introduce policies that can strengthen digital infrastructure and enhance access to financial services.

There is an urgent need to make the lending process more efficient and accessible, which requires government support through targeted regulatory reforms. Establishment of a dedicated India Fintech Credit Fund (IFCF), could be a game-changer in enabling smaller fintech companies to access affordable financing; This initiative shall help establish robust regulation to curb illegal lending, consumer protection, and enhancement. Besides, the gaps in underserved markets, especially in Tier II and Tier III.”

Shefali Mundra, Tax expert, ClearTax 

“As the Union Budget approaches, there’s growing anticipation that Finance Minister Nirmala Sitharaman will enact reforms to benefit the vast and diverse populace of taxpayers in India. The current tax system includes a wide array of sections, deductions, and exemptions, which poses significant challenges for taxpayers.

“This forthcoming budget is anticipated to roll out several key reforms designed to streamline the tax experience in India. Expected changes include establishing a straightforward residence rule that distinguishes between residents and non-residents more clearly, implementing a unified tax structure that levels the playing field for domestic and international companies alike, and clarifying the tax timeline by consolidating the financial and assessment years into a single, understandable term. Moreover, the budget seeks to simplify the overall tax structure to make it more transparent and less cumbersome, facilitating easier compliance for both individuals and enterprises.”

Khadim Batti, Co-founder and CEO, Whatfix

“India’s SaaS industry, a key driver of digital transformation, looks to the 2025 Union Budget for further policy support. Key expectations include simplifying FDI and investment rules, aligning LTCG tax for unlisted entities with public companies, and enhancing digital infrastructure like high-speed internet and data centers. The budget should also focus on scaling AI, IoT, and emerging technologies, alongside increased R&D funding. Expanding talent development through initiatives like Skill India Digital will address the global tech talent gap. With these measures, the SaaS industry can help India reach its $100 billion goal by 2030 and become a global digital economy leader.”

Amit Ramani, Chairman and MD, Awfis Space Solutions

“The Union Budget 2025 presents an opportunity to accelerate startup growth in India. We urge the government to simplify the business environment, create startup hubs with modern facilities, and partner with coworking operators to foster innovation and employment. Simplifying regulatory procedures in Tier-II cities and offering tax incentives, streamlined regulations, and digital infrastructure will reduce costs and support growth. Additionally, simplifying the setup process for Global Capability Centres (GCCs) will enhance India's position as a global business hub, driving economic growth and empowering modern businesses.

Jayesh Bavle, CFO, Bertelsmann India Investments

“We hope the budget capitalises on India’s growth momentum by boosting consumption and economic activity while maintaining fiscal discipline. Minimal tax changes would reinforce policy stability and ease of doing business. We’d also like to see tax provisions adjusted to reflect changing business models, such as deferring tax on share swap transactions and expanding tax loss carryforward rules for companies with genuine shareholding changes. We eagerly await the budget.”

Nilay Patel, Founder and Managing Director, Easy Pay 

“As the budget approaches, we expect continued support for ecommerce, including further reduction in TDS rates and initiatives to enhance liquidity and simplify compliance. We also anticipate measures to foster entrepreneurship, strengthen fintech-bank collaboration, and promote financial inclusion. Additionally, we hope for incentives to support innovation and empower digital entrepreneurs for more inclusive economic growth.”

Anand Jain, Co-founder and Chief Product Officer, CleverTap 

“The upcoming budget should focus on emerging sectors like SaaS, Web3, and AI, which are driving India’s tech leadership. Clear regulations for digital assets and AI initiatives will foster innovation and attract investment. Simplifying tax laws, extending ESOP tax deferment, and revisiting income tax slabs can support startups, MSMEs, and stimulate economic growth.”

Sandiip Bhammer, Managing Partner, Green Frontier Capital

“As the globe looks to India for leadership in the fight against climate change, the upcoming budget offers a pivotal opportunity for us to take pole position by accelerating growth in the greentech, energy and electric mobility sectors. Priorities should include scaling production-linked incentives (PLIs) for EV manufacturing, introducing tax benefits for R&D in breakthrough climate-tech solutions and strengthening adoption of renewable energy with clear implementation roadmaps. By creating an enabling ecosystem for private capital and innovation, India can not only meet its climate goals but also emerge as the global hub for green solutions that drive sustainable growth.”

Neeraj Tyagi, Co-founder and CEO, We Founder Circle

“From our experience of investing in over 50 startups from Tier II, III, and IV cities, we recommend key measures for Budget 2024-25. Streamlining fundraising and incentivizing SEBI funds to invest in startups from smaller cities can drive regional growth. Collaborating with local incubators for tailored support will further empower startups, fostering innovation across sectors like fintech, healthcare, education, and clean energy.”

Anil Joshi, Managing Partner, Unicorn India Ventures

“The venture capital industry seeks key reforms in the upcoming budget, including the removal of the Angel Tax to encourage early-stage investments without fear of scrutiny. Other demands include GST relief on management fees, aligning long-term gains with listed entities, and faster approvals for overseas investments to boost the ecosystem.”

Anirudh A Damani, Managing Partner - Artha Venture Fund

“The new government's first budget brings high expectations for streamlining the entrepreneurial ecosystem. Key asks include removing the angel tax, reducing GST slabs, and simplifying tax laws, including LTCG and STCG. A dedicated business bank for SMEs and startups, along with a simplified direct tax code, would drive growth, innovation, and ease of doing business.”

Arun Kumar Nayyar, CEO and Managing Director, NeoGrowth Credit 

“The government's dedication to MSME growth is evident through its initiatives. Key expectations include improved credit access, enhanced digital infrastructure, and liquidity support. With 82% of MSMEs planning digital adoption, skilling programs and regulatory reforms are crucial to driving growth, resilience, and economic stability in the sector.”

Amit Khatri, Co-founder, Noise

“India’s journey to 'Viksit Bharat' relies on fostering deep tech entrepreneurship. With 14% of startup funding going to deeptech, a robust regulatory framework and strategic R&D funding are vital. Updating the National Policy on Electronics, incentivising local manufacturing, and supporting Aatmanirbhar Bharat will drive innovation, jobs, and global leadership in smart wearables.”

Nalin Negi, Chief Financial Officer & Interim CEO, BharatPe

“The Interim Budget presents an opportunity to boost fintech growth and financial inclusion as India aims for a $5 trillion economy by 2025. Key expectations include increased capital for underserved sectors, measures to aid credit growth, and policies on digital banking and data governance. Tax benefits for research, innovation, skill development, and expanded ESOP relief for startup employees are also anticipated. The hope is for enhanced collaboration between fintechs and policymakers to drive India’s digital economy.”

Yagnesh Sanjharka, Founder and CFO, 100X.VC

“Startups are urging reforms in ESOP taxation, parity in taxing unlisted and listed entities, and a lower 12% GST rate to drive growth. Key demands include a single-window approval system for registrations, extended Section 80IC benefits, and automatic SEBI approvals for AIFs in outbound investments. Tax incentives for angel investors are also sought to boost early-stage funding and entrepreneurship. These measures could foster innovation and strengthen the startup ecosystem.”

Dinkar Agrawal, Founder, CTO & COO, Oben Electric

"The Union Budget 2025 is a key moment to accelerate India's EV transition and achieve 30% EV penetration by 2030. A uniform 5% GST on EVs, components, and charging infrastructure, along with fixing the inverted GST on raw materials, can cut costs and boost manufacturing. Performance-linked incentives for battery innovation and local component production will strengthen the Make-in-India push. On the consumer side, lower interest rates on EV loans and targeted subsidies can improve affordability and drive adoption.”