Union Budget 2026: Is retail media set for Its breakthrough?

It’s no longer a surprise that over the past few years, retail media has shifted from being purely a conversion-focused tool to a central component of brands’ media strategies. Initially seen as an efficiency-driven channel targeting last-click outcomes, it has steadily risen in importance for marketers, reshaping how budgets are planned, allocated, and measured. Last year marked a defining moment: retail media’s growth significantly outpaced other digital channels, cementing its status not as an experimental add-on but as a core investment priority for brands seeking measurable and accountable returns.

Industry estimates indicate that India’s retail media advertising revenues crossed ?24,000 crore in 2025, with projections approaching ?30,000 crore in 2026, potentially representing nearly 15% of the nation’s total ad spend. Increasingly, brands are integrating retail media as a key link within the broader commerce funnel rather than treating it as a standalone performance silo.

However, despite this momentum, successive Union Budgets have not provided dedicated policy support or fiscal recognition for retail media. There remains no formal acknowledgment of retail media as a distinct category within the digital economy, no clarity on GST treatment or tax parity with other ad formats, and no targeted incentives for data-driven commerce ecosystems to help brands and platforms scale confidently.

According to Mayank Shah, Chief Marketing Officer at Parle Products, the Union Budget presents an opportunity to strengthen consumption fundamentals while enabling data-led growth. “Measures that boost disposable incomes, especially in price-sensitive urban and rural markets, will translate into stronger demand and deeper shopper engagement on retail platforms. Continued investment in digital infrastructure, commerce enablers, and supply-chain efficiency will help retail media evolve into a credible, performance-driven channel, allowing brands to invest sustainably in long-term consumer relationships,” he said.

As the industry approaches this year’s Union Budget, the discussion around meaningful support for retail media has sharpened. Arjun Ranga, Managing Director at Cycle Pure Agarbathi, emphasized that while recent policy support has helped stabilize MSMEs, the focus must shift toward long-term competitiveness. He highlighted high compliance costs and operational inefficiencies in traditional manufacturing, calling for simplified regulations and targeted R&D support, especially for sustainable raw materials. Ranga added that enabling eco-friendly packaging infrastructure and accelerating digital adoption at the MSME level will be key to expanding rural penetration and unlocking the next phase of retail growth.

Shivendra Nigam, CFO of Cantabil, noted, “For Budget 2026, it is vital to sustain momentum in the retail sector, which contributes nearly 10% to India’s GDP and stands at a crucial growth point. A unified Retail Policy could simplify regulations, ease compliance, and improve overall ease of doing business, helping both established and emerging brands operate efficiently and unlock the sector’s potential over the next decade.”

Anupam Bansal, Executive Director at Liberty Shoes, added, “Fiscal policy should support both demand and supply across the consumer and retail ecosystem. Measures that enhance disposable income will stimulate consumption, while affordable financing, easier access to credit, and relief on operating costs can strengthen the broader retail framework.”

Policy Levers Retail Media Awaits
Industry leaders believe retail media’s next growth phase relies as much on policy clarity as on India’s retail and manufacturing ecosystem. Expectations from Budget 2026 include formal recognition of retail media as a distinct advertising category, clearer tax and GST guidelines, standardized measurement and attribution norms, and stronger digital and data infrastructure.

Such measures would provide predictability for retail media investments, encourage wider brand participation, and allow the ecosystem to transition from fragmented experimentation to a mature, accountable growth phase. Consumer-facing businesses see these expectations as closely tied to the health of the broader manufacturing and MSME sectors.

From the beauty and personal care sector, Ankit Virmani, Director at Esskay Beauty Resources, urged the government to rationalize GST and reduce customs duties on essential imports and raw materials, maintaining accessibility of quality products at the grassroots level. He also called for accelerating MSME formalization by linking Skill Council certifications to incentives, improving compliance, standardizing service quality, and creating sustainable employment.

Ekansh Garg, Co-founder and CEO of Cravicious Foods, emphasized that retail media should be viewed as part of India’s digital commerce backbone, not just an advertising layer. He highlighted the importance of interoperable data systems between brands and retailers, public investment in digital cataloging and demand forecasting tools, and fair access to retail media inventory so smaller food brands aren’t priced out.

Marketers’ Wishlist for Retail Media
From a marketing perspective, industry experts stress the need to recognize retail media’s evolution. Ravanan N, CEO of Oneindia, noted that retail media has moved from experimentation to scale and argued that Budget 2026 should reflect this transition. He called for clarity around data usage, measurement standards, consumer privacy, and a more enabling capital environment.

Media planners echoed the need for predictability over incentives. Shrikant Shenoy, AVP at Lodestar UM, emphasized that confidence in stable, well-regulated retail media environments is critical. Continued government support for digital infrastructure and interoperable payment systems indirectly strengthens retail media by increasing measurable, high-intent transactions brands can plan, buy, and evaluate.

Vejay Anand, Senior Advisor at Prequate, highlighted retail media’s tipping point, expecting the ecosystem to reach $3 billion by 2027. He called for formal recognition under the Digital India framework, consistent GST application, industry-wide measurement standards developed with government bodies, PLI-style incentives for analytics, data centers, AI-driven personalization, and stronger MSME and kirana enablement to ensure inclusive growth.

Overall, brands, marketers, and experts are aligned in expecting Budget 2026 to recognize retail media as a strategic pillar of India’s advertising ecosystem. Clearer policies, tax certainty, and stronger digital infrastructure could help retail media evolve from a high-performing channel into a long-term growth engine for brands of all sizes. Whether Budget 2026 delivers remains to be seen, but the sector now sits at a pivotal inflection point.

All eyes are on the Union Budget and its impact on the future of retail media in India.