The Finance Minister of India, Smt. Nirmala Sitharaman recently announced the Union Budget 2025 for the Financial Year 2025-2026. Let’s explore how this budget stands to aid the beauty industry and its stakeholders.
Starting with a quote from the famous Telegu poet, Shri Gurajada Appa Rao: “A country is not just its soil; a country is its people.” the Finance Minister presented the Union Budget 2025-26. The theme for this year’s Budget was “Sabka Vikas”, aiming to look at growth and prosperity in all sectors.
The Union Budget highlighted that the four pillars of a Vikisit Bharat are
- Agriculture
- MSME
- Investment
- Exports
The four pillars, as stated by the Finance Minister along with the proposals under the budget bring a lot of hope for the Indian beauty and salon industry. Let’s explore.
What the Beauty Industry Expected
Before the announcement of the Union Budget 2025, the Indian beauty industry sought policy changes that ensure ease of business, growth, new opportunities, and affordability.
The key hope was lowering the GST Rates for salon services from 18% to 12%. This is because 18% GST is levied on these basic services as well as on the products that are used for these services. In view of this, the Hair & Beauty Federation, representing over 80 lakh salons across India, had appealed to the Ministry of Commerce and Industry to review the GST rates.
Apart from GST, the industry hoped for simplified export procedures. While Indian beauty products have a lot of untapped potential, there’s a lot that the industry can do on a global platform. That is provided it receives ample support from the government.
What the Budget Holds for the Indian Beauty Industry
Income Tax Regime
As per the Union Budget of 2025, incomes up to INR 12,00,000 will have zero tax liability in FY 2025-26 (AY 2026-27). The revised income tax regime suggests that people who earn upto INR 12 Lakhs will not be required to pay tax as there’s an increase in rebate of INR 60,000. Additionally, salaried individuals earning upto INR 12,75,000 will have no tax liability as the standard deduction available is for INR 75,000.
The new income tax slabs are:
- Income up to Rs 12 lakh: No tax.
- Rs 8-12 lakh: 10%
- Rs 12-16 lakh: 15%
- Rs 16-20 lakh: 20%
- Rs 20-25 lakh: 25%
- Above Rs 25 lakh: 30%
The increased tax rebate will boost disposable income, allowing professionals in the beauty and salon industry to reinvest in their craft and businesses. Salon owners can upgrade equipment, enhance training programs, and expand services. Additionally, increased consumer spending power could encourage demand for premium salon experiences.
Increased Focus on MSMEs.
The Finance Minister calls MSMEs the second pillar of a Vikisit Bharat. Several beauty industry stakeholders, including entrepreneurs and makeup artists are likely to benefit from the budget.
To help MSMEs scale and upgrade, and to gain better access to capital, the budget has revised the limits for the classification of all MSMEs.
The Finance Minister introduced a new scheme aimed at supporting 5 lakh first-time entrepreneurs from among women, Scheduled Castes, and Scheduled Tribes. Under this initiative, term loans of up to ₹2 crore will be provided over the next five years. As the beauty industry comprises a large number of women, this initiative is sure to help.
The Budget also allows for an increase in credit availability with guaranteed cover. This move will help enable salons and artists to invest in high-quality products and modern equipment. It will help many beauty firms and individuals to stay competitive in this fast-evolving industry.
With revised MSME classification limits, more beauty businesses, including salons, spas, and independent artists, can register as MSMEs and access government benefits like subsidies, easier loans, and tax relief. This along with enhanced credit facilities enables salons to expand, invest in better training, and upgrade infrastructure. Easier access to capital supports entrepreneurship, encouraging more professionals to start beauty ventures. Additionally, improved financial aid can enhance job creation in the industry. It will boost employment for hairstylists, makeup artists, and wellness experts, ultimately strengthening the beauty sector’s contribution to the economy.
Enhanced Focus on Exports
Exports have been referred to as the fourth pillar of growth. The government will support businesses in expanding domestic manufacturing to better connect with global markets. Measures include easier access to export credit, assistance for MSMEs in handling trade barriers, and cross-border financing support.
A new digital platform, BharatTradeNet (BTN), will be launched to simplify trade documentation and financing. These efforts aim to make international trade smoother and help Indian businesses integrate more effectively into global supply chains.
Government support for exports will open new opportunities for the beauty industry to expand globally. With improved access to credit and streamlined trade processes, businesses can scale operations. Also, businesses can explore international markets, and strengthen their presence in the global beauty sector. As a result, Indian beauty professionals, brands, and entrepreneurs will gain better recognition, allowing long-term growth and sustainability in the industry.
Enhanced Focus on Increasing Spending of Middle-Class Households
The budget suggests increased spending as an aspiration for Viksit Bharat. With increased spending power among middle-class households, the beauty industry stands to benefit from higher demand for grooming, wellness, and professional services. More disposable income allows businesses to expand, upgrade infrastructure, and invest in staff training.
Entrepreneurs in the beauty sector can explore new opportunities, while salons and spas can enhance customer experiences. As consumers prioritise self-care and wellness, the industry will see steady growth. It will be strengthening its role in the economy and opening doors for new business models and collaborations.