- Cloud and Cybersecurity incentives are not distinctly articulated
- On-ground execution will be critical post-excitement
- Support for electronics manufacturing with a budget outlay of ₹25,000 crore
- Customs duty exemptions aimed at enhancing semiconductor manufacturing
The Union Budget for 2025-26 has introduced measures to promote the technology sector, with the intent to enhance innovation, digital infrastructure, and self-reliance across various industries. The budgetary provisions are set to significantly influence India’s technological landscape, stimulating economic growth and improving global competitiveness. Although there is considerable optimism, responses within the digital community regarding the Budget are mixed. “There are several commendable initiatives for the digital economy. The budget aims to strengthen the digital and technology sectors, promoting innovation and bolstering India’s standing in the global tech arena. My concern lies in the actual implementation of these measures. We have witnessed previous notably ambitious disinvestment and agricultural modernization initiatives falter recently,” observes Abhijit Majumdar, Partner – Digital Strategy, PwC.
Key highlights of the Budget concerning the digital ecosystem:
- Support for Fintech and Digital Payments: Allocation of ₹1,000 Cr for a fintech fund, incentives for startups, and reinforced cybersecurity measures for our digital payment infrastructure.
- Incentives for Electronics Manufacturing: Elimination of import duties on smartphone components, thereby enhancing India’s appeal in the global mobile supply chain.
- Backing for Startups and Deep Tech: Introduction of a new Fund of Funds for Startups with an additional ₹10,000 Cr, along with a Deep Tech Fund of Funds (currently under consideration) to catalyze next-generation startups.
- Promotion of Research and Development: A budget of ₹20,000 Cr allocated for private sector-driven R&D and innovation.
- India AI Mission: Establishment of AI Centers of Excellence focused on education to integrate AI into the antiquated educational systems, fostering innovation from early educational stages.
What’s missing in the India Budget 2025?
“From a technological standpoint, the India Budget 2025-26 indicates a robust push towards self-reliance, innovation, and digital transformation. However, certain areas seem to lack adequate focus,” states Dr. Yusuf Hashmi, technology leader and CISO of Jubilant Bhartia Group.
• No specific incentives for AI startups or semiconductor fabrication plants, despite global trends.
• Cybersecurity funding is not directly emphasized, even as threats grow for critical infrastructure.
• Absence of incentives for the Cloud and SaaS sectors, while regions like the US and EU extend tax advantages for cloud investments.
“While the Budget serves as a strong facilitator for tech-driven advancement, there is a pressing necessity for structured incentives in cybersecurity, AI, and semiconductor manufacturing to compete with global frontrunners. The government’s focus on self-reliance, digital infrastructure, and R&D is encouraging, but its implementation will be crucial,” Hashmi comments.
