India Budget 2026: Big Boost for AI, Cloud, Semiconductors and Tech Growth
The Indian Union Budget 2026-27, presented by Finance Minister Nirmala Sitharaman, put technology and artificial intelligence (AI) front and center as engines of economic growth, jobs and global competitiveness. This year’s fiscal blueprint isn’t just numbers — it signals a long-term strategic push to build India’s digital infrastructure, skills ecosystem and research ecosystem around cutting-edge tech.
Here’s what matters most for AI, tech companies, startups, and investors.
1. AI, Digital Infrastructure and Data Centres Are Priorities
The government made clear that AI is now core infrastructure — similar to roads, energy and telecom in importance. Tech leaders welcomed this shift, saying the budget reduces regulatory friction and encourages scale in digital infrastructure, especially data centres.
Tax Clarity for Cloud & AI
One of the most impactful announcements: foreign tech companies using Indian data centres get a 20-year tax holiday until 2047. This is designed to attract cloud and AI workloads to India and make the country a global data hub.
This move alone could shift global infrastructure decisions for cloud providers and AI firms.
2. India Semiconductor Mission 2.0 & Local Capabilities
To compete globally in semiconductors — the foundation of AI hardware — the government launched India Semiconductor Mission 2.0 with dedicated funding. The programme focuses on:
- Semiconductor equipment and material manufacturing
- Chip design and talent development
- Strengthening supply chains
This aims to reduce import dependency and build local competitive strength in AI hardware.
3. Long-Term Electronics & Cloud Push
A major increase in the electronics manufacturing PLI budget (₹40,000 crore) signals the government’s intent to transform India into a manufacturing hub for tech hardware. This will support everything from chips to tooling to high-tech industrial ecosystems.
4. AI and Emerging Technologies Embedded in Public Strategy
The budget goes beyond incentives and subsidies:
- A high-powered panel was proposed to study AI’s impact on the services sector, workforce and job markets.
- India also plans AI integration across governance, education, agriculture, customs and more — treating AI as a productivity multiplier, not just a standalone sector.
This reflects a shift from tech as a tool to tech as strategic capacity.
5. Bharat-VISTAAR: AI for Agriculture & Inclusion
A standout innovation initiative was the announcement of Bharat-VISTAAR, a multilingual AI advisory tool that will integrate agricultural data and advisory systems. Its goal is simple but big: help farmers improve decisions, access customized insights and boost productivity — all in regional languages.
Funding for AI missions and research funds were also confirmed.
6. Skill Building, Education & Jobs for the Next Decade
Budget 2026 embeds AI into educational and skilling ecosystems:
- AI and digital technology training for teachers
- Upskilling and reskilling programmes for youth
- Animation, Visual Effects, Gaming and Creative sector labs in thousands of schools and colleges
- A new design institute in Eastern India to boost creative talent pipelines
This isn’t a short-term sprint to boost a few startups — it’s laying human capital foundations for long-term competitiveness.
7. What This Means for Tech Companies & Startups
Experts have two broad takeaways:
1. India is serious about attracting AI & cloud investments.
Tax holidays + infrastructure support mean global players and local founders get better risk-reward calculus.
2. Policy is moving from pilot projects to structural support.
Skill development, institutional backing and integrated missions suggest that AI policy isn’t just hype — it’s being operationalised.
Industry bodies like Nasscom welcomed the moves as “nurturing the local AI, IT and data centre ecosystem”