Finance Minister Nirmala Sitharaman presented the Union Budget 2026-27 with a strong focus on accelerating India’s transformation into a global hub for technology, manufacturing, digital infrastructure, and innovation. The Budget emphasised capital investment, semiconductor manufacturing, data centre expansion, artificial intelligence, MSME empowerment, and ease of doing business, reinforcing the government’s long-term vision for a resilient and future-ready economy.
With record capital expenditure, targeted incentives for high-tech manufacturing, and sustained emphasis on skilling and research, the Budget seeks to create a strong foundation for sustainable growth, job creation, and global integration. Industry leaders across technology, electronics, cloud infrastructure, AI, gaming, and digital services have welcomed the reform-oriented approach, calling it a significant step towards building a resilient and future-ready India.
Strong Push for Technology and Digital Infrastructure
A major highlight of the Budget was the launch of India Semiconductor Mission 2.0 with an enhanced outlay of ₹40,000 crore, aimed at strengthening domestic chip manufacturing, design, and research capabilities. The government also announced a tax holiday till 2047 for foreign cloud companies using Indian data centres, along with simplified safe harbour norms for IT services.
All IT-related services, including software development, IT-enabled services, KPO, and contract R&D, will now be brought under a single Information Technology Services category with a uniform safe harbour margin of 15.5%, reducing compliance burden and improving operational clarity. Capital expenditure was raised to a record ₹12.2 lakh crore for FY27, underlining continued investment in infrastructure, connectivity, and industrial development.
Focus on AI, Research, and Future Technologies
Recognising artificial intelligence as a strategic growth driver, the Budget enhanced support for the AI ecosystem through dedicated missions, research funding, and innovation grants. Investments under the Anusandhan National Research Foundation and the R&D and Innovation Fund aim to accelerate translational research and commercialisation. A multilingual AI tool for farmers was also announced to improve agricultural productivity and data-driven decision-making.
Creator Economy and Education Initiatives
The government unveiled plans to establish an Indian Institute of Creative Technologies (IICT) in Mumbai to support the animation, VFX, and gaming sectors. Additional initiatives include five university townships, academic zones, district-level girls’ hostels, and a new National Institute of Design in East India. AVGC creator labs will be rolled out across schools and colleges to build a future-ready creative workforce.
Industry Leaders React: Strong Endorsement for Reform and Investment Push
Industry leaders across technology, electronics, infrastructure, AI, gaming, and digital services welcomed the Union Budget 2026-27, highlighting its long-term vision and growth-oriented approach.
Alok Dubey, Chief Financial Officer, Acer India, welcomed the government’s focus on strengthening the technology and electronics ecosystem. He stated, “We welcome the Government of India’s strong and forward-looking focus in the Union Budget 2026-27 on strengthening the technology and electronics ecosystem. The launch of India Semiconductor Mission 2.0 with an expanded ₹40,000 crore outlay for electronics and semiconductor manufacturing underscores a decisive push to build India into a global high-technology manufacturing hub, a move that will benefit the broader IT and computing hardware industry.”
He further added, “The announcement granting strategic importance to data centre infrastructure and efforts to enhance compute-ready environments aligns well with the growing need for high-performance computing and AI-enabled solutions across sectors. We also appreciate the emphasis on deep tech and AI-related initiatives, including enhanced support for AI ecosystem development and next-generation capabilities that can help drive local innovation and accelerate the adoption of cutting-edge technologies.”
He emphasized, “Such measures will strengthen India’s tech value chain, unlock opportunities for domestic research and development, and support companies in contributing to the Digital India vision, scaling investment, and delivering advanced solutions to enterprise and consumer segments alike"
Sanjay Sehgal, CEO and Managing Director, TP-Link India, highlighted the Budget’s focus on localisation and manufacturing. He said, “The Union Budget 2026 sends a strong signal of intent around strengthening India’s electronics and high-tech manufacturing ecosystem. The continued focus on capital expenditure, the ₹40,000-crore boost to the electronics PLI scheme, and the launch of Semiconductor Mission 2.0 will accelerate localisation, deepen the component supply chain, and position India as a global hub for advanced technology manufacturing.”
He added, “For companies like us, this creates the right environment to expand local production, invest in innovation, and build products that are designed and made in India for global markets. We see this as a significant step towards making India truly self-reliant and globally competitive in the digital infrastructure space.”
Navin Gupta, National President, FAIITA, welcomed the Government’s strategic emphasis on digital infrastructure. He said, The Federation of All India IT Associations (FAIITA), representing India's dynamic IT industry, extends its sincere appreciation to the Government of India for its strategic emphasis on digital infrastructure in the Union Budget 2026-27. Key highlights include a tax holiday until 2047 for multinational corporations providing cloud services from India, designed to catalyze investments in data centers and enhance the nation's digital ecosystem."
He further added, "The Budget establishes a uniform safe harbor margin of 15.5% for IT services, accompanied by an elevated threshold of ₹2,000 crore, promoting stability and growth for the sector. FAIITA particularly welcomes the launch of Semiconductor Mission 2.0, the next phase of the India Semiconductor Mission, which prioritizes indigenous production of equipment, materials, and full-stack designs powered by Indian intellectual property (IP)."
He remarked, "Furthermore, the enhanced allocation of ₹40,000 crore for the Electronics Components Manufacturing Scheme (ECMS), coupled with targeted investments in artificial intelligence (AI), data centers, and digital expansion, underscores the Government's commitment to technological self-reliance. These forward-looking measures are poised to generate substantial employment opportunities in India's IT sector and position the country as a global leader in digital innovation."
"FAIITA remains dedicated to collaborating with the Government to realize these objectives and advance India's digital sovereignty. The Federation of All India IT Associations (FAIITA) is a premier industry body advocating for the growth and interests of India's IT ecosystem," he concluded.
Hemant Tiwari, Managing Director – India and SAARC, Hitachi Vantara, highlighted the importance of long-term digital infrastructure policies. He stated, “The Union Budget 2026-27 is a significant step in strengthening India’s digital and data infrastructure. By providing long-term incentives and a clear safe harbour framework for data centres and cloud services, the government is creating an ecosystem that encourages global investment and drives technological innovation.”
He further explained, “These measures will accelerate the growth of world-class data centres, enable secure and efficient cloud operations, and foster the adoption of emerging technologies such as AI. By supporting infrastructure development across Tier 2 and Tier 3 cities and facilitating a robust digital services ecosystem, the budget positions India to become a global hub for data, cloud, and IT services, while creating new opportunities for talent and sustainable economic growth.”
Subhasis Majumdar, Managing Director, Vertiv India, described the Budget as a major catalyst for digital infrastructure investment. He said, “The Union Budget 2026-27 positions India as a serious global player in digital infrastructure and cloud services. The long-term tax holiday for foreign cloud companies until 2047 is a game-changing move. This move will dramatically improve investment and make India significantly more competitive.”
He further added, “As a global leader in critical infrastructure that powers data centres, AI factories, hyperscale campuses, and cloud environments, we see this as a direct accelerator for the high-density, high-efficiency facilities that will define tomorrow’s digital economy. Our advanced power systems, liquid cooling technologies, and integrated rack solutions are purpose-built to support exactly this scale of sustainable, AI-ready build-out.”
He emphasized, “Equally important is the much-needed relief given to the broader IT services industry. These measures will bring huge relief in compliance burden and allow companies to focus on business growth and innovation. Together, this will attract large global cloud investment, drive massive new data centre capacity, create a huge multiplier effect for power, cooling, critical infrastructure and digital ecosystem players. We firmly believe that this budget will accelerate India’s emergence as a global digital infrastructure powerhouse.”
Sunil Mathur, Managing Director and CEO, Siemens Limited, welcomed the government’s disciplined fiscal approach. He stated, “We welcome the government’s consistent focus on long-term economic growth and structural transformation in the Union Budget 2026-27. The record INR 12.2 lakh crore capital expenditure allocation, sustained emphasis on infrastructure development, and a fiscal deficit target of around 4.3% reflect a continued and disciplined approach to strengthening India’s growth foundations.”
He added, “The budget’s focus on technology-led manufacturing, digital infrastructure such as data centers, and next-generation mobility including high-speed rail supports India’s ambition to become a global innovation and manufacturing hub.”
He emphasized, “Continued support for MSMEs, skilling, and ease of doing business will be critical in ensuring that growth is broad-based and resilient. As industries navigate rapid technological change, the government’s spotlight on scale, execution, and investments in connectivity, smart infrastructure, and talent development provides a clear and credible roadmap for sustainable and inclusive growth.”
Sunil Bharti Mittal, Founder and Chairman, Bharti Enterprises, described the Budget as growth-oriented and inclusive. He said, “A bold Budget that combines growth with inclusion. The strong emphasis on skilling, alongside sustained investments in science, innovation, and research are timely & will strengthen domestic capabilities, advancing import substitution in critical sectors. Bolstering infrastructure and logistics, with a focus on energy efficiency and impetus for the data centre ecosystem, will further reinforce confidence in our burgeoning digital economy.”
He emphasized, “Bharti remains highly committed to play its part in enabling technology-led growth, expanding financial inclusion, and accelerating future-ready education through Bharti Airtel Foundation to secure India’s talent dividend.”
Saket Gaurav, CMD, Elista, highlighted the export and manufacturing focus. He said, “The Union Budget 2026 represents a meaningful step for India’s electronics manufacturing landscape, including the consumer durables sector, particularly through its emphasis on strengthening export competitiveness and improving the operating environment for exporters. Measures focused on duty rationalisation and cost efficiencies will help Indian manufacturers remain competitive in global markets while navigating ongoing supply-chain and pricing pressures.”
He added, “The launch of India Semiconductor Mission 2.0 with an outlay of ₹40,000 crore, along with the ₹10,000 crore Shakti initiative, is a longer-term play that strengthens India’s electronics ecosystem across the value chain. By focusing on equipment, materials, full-stack design and the development of Indian intellectual property, these initiatives build a strong foundation for future manufacturing growth.”
“What is particularly encouraging is the emphasis on industry-led research, skilling and training. For manufacturers, this translates into greater confidence to invest in local capacity and long-term capabilities. Together, these measures have the potential to generate significant direct manufacturing employment, along with wider indirect opportunities across components, logistics and services. This alignment between capability-building, job creation and export enablement is essential if India is to scale domestic manufacturing while remaining closely integrated with global markets,” he concluded.
Sachin Panicker, Chief AI Officer, Fulcrum Digital, highlighted the strategic role of artificial intelligence. He stated, “The Union Budget 2026-27 recognises that artificial intelligence is no longer an experimental technology but a strategic lever for governance, productivity and economic growth. It has specifically highlighted AI applications to enhance governance and introduced measures such as the AI Mission, National Quantum Mission and significant new funding through the Anusandhan National Research Foundation and the Research and Development and Innovation Fund.
He further added, “At Fulcrum Digital, we believe the 21st century’s true potential lies in shifting from simple automation to Intelligence Amplification (IA). By backing R&D and innovation funds, the government is providing the essential fuel for enterprises to move beyond experimentation to real-world, scalable impact.”
He noted, “Equally important is the decision to substantially enhance the safe harbour threshold for IT services from ₹300 crore to ₹2,000 crore, which will significantly reduce compliance friction and improve operating certainty for a much broader set of technology firms. This move aims to strengthen India’s technology ecosystem by expanding research capacity, supporting translational innovation and building future capabilities in sectors such as agriculture, healthcare, education and public services.”
He emphasized, “For this framework to create measurable impact we need coordinated implementation with industry and academia, greater focus on data and compute infrastructure, and skilling pathways that align with the evolving demand for specialised AI talent.”
Arjun Bajaj, Director, Videotex, welcomed the manufacturing incentives. He said, “The Budget is a positive step for the consumer electronics industry, with the introduction of ISM 2.0 and a significant increase in the outlay for the Electronics Components Manufacturing Scheme to ₹40,000 crore, along with support for the rare earth permanent magnet ecosystem. These measures are expected to strengthen the sector over the long term. Overall, the Budget’s emphasis on skill development, domestic manufacturing, and infrastructure lays a strong foundation for innovation and long-term competitiveness across the electronics ecosystem.”
Pinkesh Kotecha, Chairman and MD, Ishan Technologies, highlighted the strategic importance of cloud infrastructure. He stated, “The Union Budget 2026–27 marks a decisive shift in positioning digital infrastructure as a strategic national asset. Long-term tax holiday for global cloud players using Indian data centres and safe harbour provisions provide much-needed certainty and the recognition of cloud and DCs alongside core infrastructure send position India as a credible hub for digital infrastructure serving global markets.”
He further added, “What stands out is the strong alignment between policy intent and execution, from sovereign cloud enablement and AI-ready data centre capacity to accelerated city-level digital infrastructure across Tier 2 and Tier 3 markets. This clearly favours players with pan-India footprints and the ability to deliver connectivity, data centres, cloud, and managed services as an integrated stack. As enterprises, governments, and high-tech industries increasingly run mission-critical, data-intensive workloads, continued support for compliant, India-hosted cloud and resilient networks will be essential.”
He remarked, “The Budget lays a solid foundation for infrastructure-led digital growth and positions integrated infrastructure providers to emerge as default digital partners in India’s next phase of industrial, cloud, and AI-driven expansion"
Piyush Jha, Group Vice President and Head – APAC, GlobalLogic, welcomed regulatory certainty. He said, “This Union Budget 2026–27 is a strong signal of policy confidence, positioning technology as the backbone of a Viksit Bharat. At a time when global macro headwinds are reshaping tech spending, the Budget brings much-needed certainty for India’s IT services and GCC ecosystem. The unified IT services safe harbour framework with a predictable 15.5% margin, along with faster closure of advance pricing agreements, meaningfully strengthens ease of doing business and reinforces India’s competitiveness as a global delivery and engineering hub.”
He added, “Just as importantly, the Budget makes a clear long-term bet on AI, through AI-led governance and enabling digital infrastructure, while recognising that India’s next growth curve will be won on talent. What is more encouraging is our government’s balanced approach, combining regulatory simplicity with long-term bets on AI-led governance, emerging technologies like quantum computing, and stronger participation of women in STEM. Put together, this is a decisive step towards making India not just a scale destination, but a high-value, trusted technology partner to the world.”
Vidit Aatrey, Co-founder, Managing Director and CEO, Meesho, highlighted the ecosystem-led approach for MSMEs. He said, “The Union Budget 2026–27 reflects a clear shift from isolated support measures to an ecosystem-led approach for Indian MSMEs and digital commerce. Initiatives such as the ₹10,000 crore SME Growth Fund, deeper integration of TReDS with GeM, and stronger credit guarantees will meaningfully ease working capital constraints for small sellers, particularly in Tier 2 and Tier 3 markets where e-commerce is growing rapidly.”
He added, “The emphasis on logistics infrastructure, cluster modernisation, and cost-efficient supply chains is critical to improving efficiency and lowering cost-to-serve. The continued focus on strengthening the MSME ecosystem, including targeted efforts to encourage women entrepreneurs, will help broaden participation and deepen livelihood creation across regions.”
He emphasized, “Beyond MSMEs, the Budget’s focus on strengthening core technology infrastructure, including data centres and cloud capacity, is an important enabler for the broader economy. By lowering the cost of domestic digital infrastructure, these measures will support wider adoption of AI-driven tools and advanced technologies across businesses of all sizes. Taken together, the Budget lays the foundation for a more resilient, inclusive, and scalable growth ecosystem.”
Girish Hirde, Global Delivery Head, InfoVision, welcomed compliance reforms. He said, "It is really encouraging that the Union Budget has increased the safe harbour limit to Rs 2,000 crore. Making it an automatic, rule-based model will simplify the process, save time, and reduce effort for companies. This streamlines accounting, tax, and compliance and also gives IT companies confidence to grow their business in India and contribute more to the country’s IT infrastructure.”
He emphasized, “On top of that, the tax holiday for foreign companies with data centres here shows that India is creating a welcoming environment for international investment. The proposal to increase funding for industry-linked labs in tier 2 and tier 3 cities by 20 percent is another positive step, as it will open up more opportunities for emerging technologies and help nurture innovation across the country."
Narendra Sen, Founder and CEO, RackBank Data Centers, highlighted India’s investment potential. He stated, “We welcome the Union Budget 2026–27 as a strong and investor-positive signal at a time when global capital is actively comparing India with other data centre markets. India already contributes nearly 20 percent of the global data economy, while the global data centre market stands at approximately 120 GW. Even capturing one percent of this opportunity highlights the scale of the current capacity gap and the headroom for growth.”
He added, “With deployed capacity still at an early stage, India has the potential to reach nearly 10 GW over the next five years, translating into investments of close to USD 70–100 billion across data centre infrastructure. Long-term tax certainty through the proposed tax holiday significantly improves return visibility for global investors, including infrastructure funds and real estate-focused capital, and makes Indian data centre platforms more attractive as a long-term asset class.”
He emphasized, “India’s advantage is not limited to policy support. Build costs in India are among the lowest globally at approximately USD 5 million per megawatt, compared to USD 10–12 million in several international markets, materially improving project economics. Combined with domestic manufacturing capability, reduced import dependence, and a strong clean energy ecosystem across solar and wind, the operating environment is structurally competitive.”
“Equally important is India’s geographic positioning. From locations across eastern and western India, data centres can serve South Asia, Southeast Asia, the Middle East and parts of Africa within low latency thresholds, enabling access to nearly half of the world’s population. This combination of market scale, cost efficiency, energy availability and policy clarity positions India as a credible regional and global hub for digital infrastructure,” he concluded.
Akshat Rathee, Co-founder and Managing Director, NODWIN Gaming, highlighted the focus on creative talent. He said, "The Union Budget 2026–27’s support for the Animation, Visual Effects, Gaming and Comics (AVGC) sector through the expansion of AVGC creator labs is a strong step toward building India’s creative and digital talent pipeline. The government’s backing of the Indian Institute of Creative Technologies (IICT), whose inauguration we were proud to be present for, reflects a clear commitment to equipping young Indians with future-ready skills across animation, gaming and storytelling.”
He added, “As organizers of large-scale cultural platforms such as the NH7 Weekender and Comic Con India, we are constantly seeking skilled talent to shape immersive experiences, and initiatives like these will help widen that pool while accelerating original IP creation and high-quality game development. Greater access to creative technologies will enable more homegrown, culturally relevant content to thrive."
Vishal Parekh, Chief Operating Officer, CyberPowerPC India, praised workforce development efforts. He said, "The Budget’s support for AVGC creator labs across 15,000 schools and 500 colleges marks a powerful step toward building a future-ready workforce. With the sector projected to require 2 million professionals by 2030, this initiative can accelerate job creation and empower young Indians to pursue high-value careers in gaming, animation, and visual technologies. Realizing this vision calls for access to high-performance computing environments that match global benchmarks.”
He added, “At CyberPowerPC India, we see this as a defining opportunity to equip the next generation with the tools they need to create, compete, and lead, fueling innovation while strengthening India’s emergence as a global creative and technology powerhouse. We commend the government’s forward-looking commitment to strengthening India’s AVGC ecosystem.”
Animesh Agarwal, Founder and CEO, S8UL Esports and 8Bit Creatives, highlighted skilling needs. He said, "Having built teams and businesses in gaming and esports over the years, I’ve seen first-hand how rapidly the AVGC sector is growing and how urgently India needs structured skilling to keep pace. The projection of two million professionals required by 2030 highlights both the scale of the opportunity and the responsibility on industry and institutions to prepare future-ready talent. Initiatives like these will not only create meaningful career pathways for young Indians but also help position India as a global hub for animation, gaming, and digital storytelling."
Sagar Nair, Head of Incubation, LVL Zero Incubator, stressed early skilling. He said, “The Finance Minister’s announcement reflects a strong commitment to India’s creative economy. With the AVGC sector expected to require nearly two million professionals by 2030, the rollout of content creator labs across 15,000 schools and 500 colleges can expand early access to future-ready skills and inspire students to pursue careers in animation, VFX, gaming, and comics.”
He emphasized, “When skilling is paired with incubation and clear pathways to entrepreneurship, India can cultivate a generation of creators equipped to build original intellectual property and compete globally. This approach can accelerate job creation, strengthen the talent pipeline, and position the country as a leading hub for creative technology and digital content.”
Madhav Sheth, CEO, Ai+ Smartphones and Founder, NxtQuantum Shift Technologies, highlighted the depth of electronics manufacturing. He stated, “Budget 2026–27 is a decisive signal that India is now playing for depth, not just scale, in electronics—doubling the push on ECMS, expanding electronics PLI to ₹40,000 crore, and rolling out Semiconductor Mission 2.0 across equipment, materials, supply chains and Indian IP. This is how we move from being an assembly base to building a resilient, high-value, India-led ecosystem—de-risking investments in components like display assemblies, camera modules and advanced PCBA, strengthening capital-goods capability through high-tech tool rooms, and cutting import dependence while boosting export competitiveness.”
He added, “For Ai+ Smartphone and NxtQuantum, it creates the runway to deliver on our core belief — ‘Made in India’ must mean ‘Designed in India’—by building software-first, India-governed products and a trusted device ecosystem anchored in Indian-owned IP and stronger local manufacturing depth.”
Ritesh Goenka, Managing Director, Damson Technologies, welcomed the government’s focus on supply chains. He said, “The Union Budget 2026, presented by Hon’ble Union Finance Minister Nirmala Sitharaman, sends a strong and reassuring signal to India’s manufacturing and electronics ecosystem. The expansion of the India Semiconductor Mission 2.0, with a substantial ₹40,000-crore outlay, along with enhanced support for the Electronics Components Manufacturing Scheme, clearly affirms the government’s commitment to building deep, resilient supply chains and strengthening indigenous IP capabilities in high-tech sectors.”
He added, “This focused push on scale, technology-led growth and supply-chain resilience will accelerate India’s emergence as a globally trusted manufacturing hub. At Damson Technologies and JUST CORSECA, we appreciate the government’s sustained commitment to ‘Make in India’ and ‘Atmanirbhar Bharat’, which provides long-term policy clarity and confidence for investments in advanced manufacturing, innovation and talent.”
Paresh Vij, Director, U&i, highlighted the impact on consumer electronics. He stated, "The Union Budget 2026, presented by Hon’ble Union Finance Minister Nirmala Sitharaman, reinforces India’s long-term vision of becoming a global electronics manufacturing powerhouse. The expansion of the India Semiconductor Mission 2.0 with a ₹40,000-crore outlay, along with enhanced support for the Electronics Components Manufacturing Scheme, will significantly strengthen domestic value chains and reduce import dependence. These measures will enable faster innovation, better cost efficiencies, and improved supply-chain resilience for consumer electronics brands.”
He added, “At U&i, we see this as a decisive step towards empowering Indian manufacturers to compete globally while delivering high-quality, affordable products to consumers. The budget provides much-needed policy stability and confidence for sustained investments in manufacturing, technology, and talent.”
Venkatraman Narayanan, Managing Director, Happiest Minds Technologies, highlighted the Budget’s long-term digital and manufacturing vision. He said, “The Union Budget 2026–27 reflects a responsible, growth-oriented approach to strengthening India’s position in the global digital and manufacturing economy, with a clear focus on long-term value creation. Anchored in the three Kartavyas of infrastructure development, capability-building, and economic security, the Budget recognises that leadership in the AI era will be shaped by sustained investments in physical, digital, and knowledge infrastructure.”
He added, “The strong emphasis on capital expenditure, including allocations for IT, telecom, and high-tech manufacturing, alongside the enhanced outlay under India Semiconductor Mission 2.0, signals a decisive push toward building a resilient semiconductor and advanced manufacturing ecosystem. These measures create the foundation for AI-enabled manufacturing, embedded systems, and next-generation engineering-led innovation.”
He concluded, “The focus on cloud and data centre infrastructure, supported by long-term tax incentives and safe harbour clarity, further strengthens India’s attractiveness as a global base for digital and AI-led services. The consolidation of IT and IT-enabled services into a unified sector complements this vision by improving ease of doing business and policy predictability. For companies like Happiest Minds, this reinforces our belief that sustainable AI success will be human-led built on responsible innovation, continuous skilling, and deep industry government collaboration.”
Amit Bajoria, Chief Financial Officer, Virtusa Corporation, emphasized the Budget’s structural reforms for the IT services sector. He said, “Budget 2026 delivers a major structural boost to the Indian IT services sector by consolidating service categories, expanding and simplifying safe harbour tax provisions, accelerating APA processes, and offering long-term incentives for cloud and data centre investments — all aimed at enhancing global competitiveness and easing compliance for domestic and multinational IT firms.”
He added, “Its focus on services-led growth, skilling, STEM capacity, and continued emphasis on semiconductor and digital infrastructure development provides clearer signals for how enterprises plan workforce readiness, engineering depth, and long-term talent sustainability.”
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