As the Union Budget for 2026–27 was presented by Finance Minister Nirmala Sitaraman, it represented a simple truth: India’s next leap will not be driven by roads and factories alone, but by algorithms, data, and digital talent working quietly behind the scenes.
Artificial Intelligence was no longer treated as an experiment or a buzzword. Instead, it appeared as an enabler, embedded across governance, education, agriculture, healthcare, and enterprise systems. The government’s intent was clear: AI must scale beyond labs and pilots, and start delivering outcomes for citizens, businesses, and institutions.
For the IT sector, the message was one of stability and confidence. Software services, IT-enabled services, KPO, and contract R&D were brought together under a single definition of Information Technology Services, reducing ambiguity that has long complicated compliance. Higher safe harbour limits and automated approvals signalled trust in the sector’s maturity, allowing companies to focus more on innovation and less on paperwork.
At the same time, the Budget looked ahead, well beyond the next financial year. By offering long-term tax certainty and incentives for global cloud and data centre players operating from India, it positioned the country as a digital backbone for the world. India was no longer just exporting code; it was exporting infrastructure, reliability, and scale.
Skilling took centre stage. Recognising that AI will reshape jobs faster than any previous technology wave, the government proposed a high-powered committee to bridge education, employment, and enterprise. The goal was not only to prepare youth for future jobs, but to ensure they remain relevant as roles evolve. AI-driven job matching, curriculum integration, and continuous upskilling became part of the national growth conversation.
The most telling signal came from how AI was woven into everyday systems. From AI-powered agricultural advisory platforms to technology-led governance and compliance, the Budget quietly redefined digital public infrastructure as a force multiplier, one that improves efficiency without excluding those at the margins.
In essence, Budget 2026–27 did not promise disruption for disruption’s sake. It promised direction. A direction where India’s IT sector moves from service delivery to strategic leadership. Where AI becomes invisible but impactful. And where technology is not just about speed or scale, but about shaping a more capable, competitive, and confident India.
This was not just a tech-friendly Budget.
It was a Budget that assumed technology as a given and built the future around it.
Technology perspectives from Tech Leaders:
Rahul Singh, CIO – Equities, Tata Asset Management said, “The Union Budget seeks to simultaneously address the medium and long-term challenges and opportunities presented by the evolving global geopolitical and economic landscape – expanding the manufacturing focus along with heavy engineering, semiconductors, electronic component, rare earths, chemical and data centres. Infrastructure focus is sharper with focus on urban infra and healthcare. The fiscal math is backed by reasonable assumptions even though the overall investment outlay and fiscal deficit seem marginally worse than was expected. In the wake of higher STT on Futures & Options and no relief on Capital Gains, corporate earnings growth in coming quarter and FY27 will become even more critical for equity market outlook over the next 12-18 months.”
Kishan Sundar, SVP and Chief Technology Officer, Maveric Systems, said, “Union Budget 2026 makes it clear that AI and IT services will play a central role in shaping the next phase of India’s banking and financial services growth. As credit demand remains strong and banks operate under tighter funding and regulatory conditions, the emphasis on digital infrastructure, AI-led innovation and technology-enabled productivity is both timely and necessary. The Budget’s focus on strengthening IT services and deepening digital capabilities provides added momentum for banks to accelerate AI adoption across credit decisioning, risk management, compliance and customer engagement. With increasing system complexity and scale, AI-driven automation and data-led decisioning are becoming essential for banks to grow responsibly while improving efficiency and resilience. Overall, the Budget reinforces technology as a foundational pillar for sustainable growth in the banking ecosystem.”
Ramki Gaddipati, CEO APAC and Global CTO, Zeta, said, “The proposed High-Level Committee on Banking for Viksit Bharat is a welcome step as it recognises a reality banks are already living with, that financial stability, consumer protection and technology resilience are inseparable. As banking operates at real-time, population scale, core architecture, cyber resilience and AI governance are now systemic priorities. With public sector banks on stronger balance sheets, this is a moment where governance and technology led reform is not just necessary, but achievable. The real test will be whether this intent translates into coordinated frameworks that strengthen the system as a whole. The Budget’s push to strengthen domestic cloud and data-centre infrastructure is timely. In real-time banking, infrastructure choices are no longer neutral, they shape risk and trust. Recognising AI beyond productivity is encouraging. But as AI becomes foundational to fraud prevention, risk management and compliance, adoption alone will not suffice. What will matter is building robust governance frameworks, strong data foundations, and operational resilience to deploy AI safely at scale, without compromising trust.”
Anil Agrawal, Founder & CEO, CIMCON Automation, said, “The Union Budget 2026’s push in the India Semiconductor Mission 2.0 will significantly help the country’s utilities automation sector. The India Semiconductor Mission 2.0 represents a meaningful commitment by the Government of India to the growth of the utilities automation sector. With a Rs 40,000 crore outlay, this initiative provides vital support to full-stack, deep-tech enterprises like ours as we develop domestic intellectual property and scale Indian innovation globally. The localization of critical semiconductor components will create a powerful snowball effect: improving accessibility, reducing lead times, and lowering costs, unlocking opportunities in price-sensitive domestic markets, and accelerating the digital transformation of utilities.”
Sanket Atal, Senior Vice President, Engineering and Country Head, India, OpenText, said,“The budget’s focus on the services sector is a welcome recognition of the critical role skilled talent plays in India’s long-term growth. The proposal to set up a high-powered Education to Employment and Enterprises Standing Committee is a practical step towards strengthening the link between education outcomes and industry requirements. Greater emphasis on market-relevant skills, particularly in emerging areas such as AI will be critical.Additionally, while India has a large workforce, gaps remain between academic training and the skills needed to develop, deploy, and manage AI-driven and cloud-based systems at scale. Addressing these gaps through closer industry-education collaboration, applied learning programmes, and continuous reskilling will be key to improving workforce readiness.Securing a ten percent share of the global services market by 2047 will depend on how effectively education systems, industry need,s and export priorities are aligned. A coordinated approach to skill development that meets global standards can enhance employability, strengthen competitiveness, and deepen India’s role in global services value chains.”
“The budget’s push to expand India’s footprint in global digital infrastructure is both timely and strategic. The proposed tax holiday till 2047 for foreign companies delivering cloud services through Indian data centres will encourage long-horizon investments and reinforce India’s position as a dependable location for critical technology operations. The consolidation of all IT-related activities into a single Information Technology Services category, along with a safe harbour margin of 15.5 percent and an increased threshold of Rs 2,000 crore, brings clarity and consistency to a sector that has long needed simpler rules. Automated safe harbour approvals will further reduce uncertainty for companies serving a global clientele from India. With the country already recognised as a leader in software development and technology enabled services, these policy steps can accelerate the next phase of growth and strengthen India’s role as a trusted partner in the global digital economy,” he added.
Amit Kumar Tyagi, CEO, TrueReach AI, said, “The Union Budget 2026 is a clarion call for the ‘Intelligence-First’ era. By proposing a tax holiday until 2047 for cloud services using Indian data centers and utilizing the Rs 10,300 crore IndiaAI Mission to provide compute at a subsidized rate, the government has eliminated the cost barriers to high-end innovation. At TrueReach AI, we are particularly energized by the Economic Survey’s shift toward a bottom-up, sector-specific AI strategy. This aligns perfectly with our ‘Entropy’ platform, which already automates 90 per cent of the SDLC. With the government targeting a 10% share of global services by 2047, we are no longer just an outsourcing hub; we are becoming an ‘AI Factory’ hub. The FM’s focus on Sovereign LMMs and the 38,000-GPU strong compute base ensures that Indian startups can now build production-grade, autonomous software 10x faster, allowing us to take ‘Made in India’ intelligence to the global stage with unprecedented scale.”
Keshava Murthy, CEO & Co-founder, Matters.AI, said,“Budget 2026 clearly signals the government’s intent to mainstream AI across governance, education, and agriculture, through the AI Mission, the Education-to-Employment Standing Committee, and platforms like Bharat-VISTAAR. As AI moves from experimentation into everyday workflows across public systems, enterprises will mirror this adoption internally. That shift brings a new challenge: organisations must gain visibility into how AI systems interact with sensitive data. The next phase of AI adoption will be defined not just by capability, but by oversight.”
Pankit Desai, Co-founder & CEO, Sequretek, said, “The Union Budget 2026 made the growth of India’s digital economy as one of the core focus area of growth of the economy. With strong GDP numbers already released, the FM focused on several initiatives that can bring more capital in the country. The announcement on raising the safe harbour limit to Rs 2000 crore for IT and ITES companies will benefit the sector immensely. For IT companies with overseas group entities, the higher Rs 300 crore threshold expands access to safe harbour provisions, reducing transfer pricing litigation and tax disputes. In effect, if transactions with overseas affiliates are priced in line with prescribed arm’s-length norms, tax authorities will not challenge the pricing methodology, bringing greater certainty, lower compliance risk, and fewer legal issues.
Additionally, the tax holiday for setting up data centres in India by foreign cloud companies gives out a strong signal as the world looks at India as a major GCC centre. This will also strengthen our technological sovereignty. The Make in India, Make for the World, has received a further impetus with the Rs 10,000 crore SME Growth Fund that will empower the growth engine of our economy to adopt emerging tech, meet risk capital requirements to become globally competitive. In a nutshell, the Budget this year attempts to lay a path for India to become a global tech powerhouse across manufacturing, services and much more”.
Himanshu Tyagi, Co-Founder, Sentient,said, “It’s encouraging to see the Union Budget 2026 reaffirm strong support for the AI Mission and the use of AI as a force multiplier for governance. India has always created outsized impact at unprecedented scale, often by adapting within complexity rather than waiting for perfect conditions. AI now changes the equation, because intent-driven systems align far more closely with that institutional strength than traditional software. The focus on jobs and skills is also critical, and open-source AI can help ensure this transition expands opportunity by allowing more builders across India to contribute directly.”
Manzoor Ameen. Co-founder & Chairman, Aicumen, said,“The Union Budget 2026–27 serves as a strategic catalyst for the convergence of physical infrastructure and digital intelligence. The announcements today underscore a fundamental shift: AI is no longer a niche vertical but the foundational operating system for India’s industrial future. The government’s plan to rejuvenate 200 legacy industrial clusters creates a significant opportunity to digitally retrofit ageing manufacturing infrastructure. For these clusters to meet modern safety, efficiency, and compliance benchmarks, automated monitoring and applied AI technologies will become essential rather than optional. Overall, this Budget bridges the gap between digital ambition and physical execution, positioning India to emerge as a global hub for applied AI across industrial environments.”
Nikita Kumawat, Co-Founder and Executive Director, Brandworks Technologies, said, “Union Budget 2026 marks a significant change in India’s electronics and semiconductor journey, shifting the focus from capacity creation to long-term capability development. The introduction of the Indian Semiconductor Mission 2.0 and the launch of the Shakti initiative, coupled with an enhanced financial outlay of Rs 40,000 crore, further strengthen the ecosystem and reflect the government’s commitment to building a future-ready ecosystem across equipment, materials, full-stack IP, and resilient supply chains. The focus on domestic component manufacturing, R&D, and workforce upskilling is a critical step towards strengthening India’s position in the global electronics value chain. These measures will reduce import dependence and create the foundation for innovation-led, sustainable growth. India’s next phase of progress will be driven by companies that integrate design, engineering, and advanced manufacturing at scale, for which Budget 2026 lays the groundwork. This transition reinforces India’s ambition to emerge as a global hub for electronics and semiconductor innovation.”
Saurav Bhaik, CEO & Co-Founder, Tagbin, said, “The Union Budget 2026 confirms that India is pushing big on future-ready technologies – skilling, deep tech, manufacturing and AI have been placed at the center of growth policy. This is exactly the moment where India can repeat its IT revolution success story in the new era of artificial intelligence. Just as the IT age had global platforms like Google and Microsoft, foundational hardware like IBM, and application champions like Infosys and TCS – the AI decade too has its platform layer (models like Gemini and ChatGPT) and its hardware champions (like Nvidia). Now, with a sharper focus on skilling, digital infrastructure and technology manufacturing as emphasized in this Budget – including initiatives like Bharat Vistar and semiconductor ecosystem expansion – India has the opportunity to become the Infosys and TCS of the AI age, building large-scale AI applications, solutions and exports that power tomorrow’s global digital economy.”
Raghav Gupta, Founder & CEO, Futurense, said, “Budget 2026–27 reinforces India’s intent to lead in the AI age by putting talent and capability building at the centre of national progress. The government’s three Kartavya – driving growth, strengthening people’s capacity and ensuring opportunity for all align strongly with the direction in which the technology ecosystem is moving. The introduction of the Capacity Building AI Missions for 25 crore people, along with support for the National Quantum Mission, Anusandhan Research Fund, and the R&D and Innovation Fund, signals a long-term commitment to creating both the talent and the infrastructure required for an AI-native economy. This is not just an investment in technology but an investment in people. By expanding access to advanced learning and accelerating innovation pathways, the Budget lays the groundwork for a workforce that can build, deploy and lead with AI across global industries. It opens the door for deeper industry, academia collaboration and a future defined by capability, confidence, and opportunity.”
Konark Trivedi, Founder and MD, Frog Innovations Ltd., said, “The Union Budget 2026 reinforces the government’s commitment to building future-ready digital infrastructure, with a clear emphasis on telecom expansion, R&D-led innovation, and rural connectivity. Policy measures around spectrum rationalisation, continued support for BharatNet, and incentives for domestic manufacturing will help accelerate 5G deployments while improving cost efficiency for operators and vendors alike. The sustained focus on PLI schemes and startup-friendly tax structures strengthens India’s ambition to emerge as a global hub for telecom equipment manufacturing. From an industry perspective, this budget positions telecom as a key enabler of economic growth, digital inclusion, and job creation, fully aligned with the Viksit Bharat vision.”
About The Author
