As the world watches closely, India’s Union Budget for 2026–27 has sparked a transformative conversation about the future of artificial intelligence (AI) and digital infrastructure. With a strong emphasis on AI, infrastructure development, and tax reforms, the budget offers a bold vision for the country’s tech-driven economy. India’s roadmap is now firmly aligned with the global digital shift, offering unprecedented opportunities for both homegrown and international businesses. Key industry leaders weigh in on how the government’s moves will reshape India’s technological landscape.
AI – India’s Strategic Growth Driver
India’s Union Budget 2026–27 recognizes AI as a central force in driving inclusive economic growth, as well as improving governance efficiency. Not just about adopting AI for the sake of innovation, but about embedding AI into the very fabric of the nation’s infrastructure, services, logistics, and security. Mr. Atul Rai, CEO and Co-Founder of Staqu Technologies, highlights that the emphasis on AI missions and research funding marks a clear shift from AI experimentation to large-scale deployment. “The government’s alignment of AI with national priorities like infrastructure and public services is setting up a robust ecosystem for real-world AI applications. This transition from theory to practical use will not only boost economic growth but also elevate India’s standing as a leader in the AI domain. Moreover, Rai stresses the importance of the government’s focus on skilling and education-to-employment pathways. These investments will ensure that the workforce is equipped to handle the growing demand for AI expertise. As AI becomes embedded across sectors, the solutions that translate research into practical applications will be crucial in enhancing productivity, safety, and operational efficiency.
Tax Reforms: Simplifying Compliance and Fostering Growth
In a bid to make India an even more attractive base for technology-driven businesses, the Union Budget has introduced key tax reforms that will benefit the IT sector and beyond. Notably, the safe harbour limit for IT companies has been raised from Rs 300 crore to Rs 2,000 crore, simplifying the tax compliance process and encouraging business growth. Mr. Girish Hirde, Global Delivery Head at InfoVision, expresses optimism about the reforms – Raising the safe harbour limit to Rs 2,000 crore is a game-changer. It will make tax and compliance processes much simpler and more predictable, enabling IT companies to focus on expansion and innovation. This change is not just for small or mid-sized companies but also for large firms, reducing the risk of litigation and uncertainty in tax obligations. However, it includes a tax holiday for foreign companies that operate data centres in India. This move creates an inviting environment for international investment. The tax holiday will encourage more global companies to build and scale their data centres in India, thereby enhancing the country’s digital infrastructure.
Empowering Startups and MSMEs with Capital for Innovation
The Union Budget has also provided a significant boost to India’s burgeoning startup and MSME ecosystem, earmarking Rs 10,000 crore as a growth fund to help these businesses scale, innovate, and create jobs. This is expected to further solidify India as a hub for technology-driven entrepreneurship. Mr. Satya Yeruva, Co-Founder & CEO of FinStackk, notes that this allocation could be the catalyst for transforming India’s startup ecosystem. The Rs 10,000 crore growth fund is a crucial step in empowering startups and MSMEs to access capital and resources needed to scale. It also reinforces India’s attractiveness as a stable base for technology-driven businesses. The emphasis on fostering entrepreneurship through direct funding and access to resources will create a strong foundation for long-term growth in India’s tech sector. By simplifying tax processes and offering targeted financial support to startups, India is reinforcing its commitment to nurturing homegrown innovation, positioning itself as a competitive player on the global tech stage.
Digital Infrastructure Backbone for AI Leadership
As the world races to establish a robust digital infrastructure to support the AI revolution, India is positioning itself to lead the charge. The Union Budget 2026-27 has made a bold move by recognizing data centres as critical national infrastructure—a necessary step in ensuring that the country can support AI growth at scale. Mr. Akshay Chhabra, CMD of 1Point1 Solutions Limited, sees this as a decisive shift. The recognition of data centres as critical infrastructure is a timely and essential move. It underscores the foundational role that digital infrastructure plays in supporting a thriving AI ecosystem. The proposed tax holiday for global cloud service providers operating data centres in India until 2047 signals India’s commitment to building a resilient and scalable digital backbone. This move will not only attract large-scale investments from hyperscalers and global cloud providers but will also accelerate the development of large-scale digital infrastructure. The incentives for cloud and hyperscale providers will increase capacity, improve talent readiness, and ensure that India remains at the forefront of the global digital economy. AI is no longer a future roadmap but it’s today’s operational reality. And with this budget, India has set itself up to be a global leader in a digital- and intelligence-driven economy.
The 2026–27 Union Budget is a pivotal moment for India’s tech industry, as it not only addresses the current needs of the ecosystem but also paves the way for future growth in AI, digital infrastructure, and global business collaboration. With these strategic investments, India is positioning itself to be a powerhouse in the digital economy—one that is ready to lead, innovate, and drive sustainable growth for the future.
As the world watches closely, India’s Union Budget for 2026–27 has sparked a transformative conversation about the future of artificial intelligence (AI) and digital infrastructure. With a strong emphasis on AI, infrastructure development, and tax reforms, the budget offers a bold vision for the country’s tech-driven economy. India’s roadmap is now firmly aligned with the global digital shift, offering unprecedented opportunities for both homegrown and international businesses. Key industry leaders weigh in on how the government’s moves will reshape India’s technological landscape.
AI – India’s Strategic Growth Driver
India’s Union Budget 2026–27 recognizes AI as a central force in driving inclusive economic growth, as well as improving governance efficiency. Not just about adopting AI for the sake of innovation, but about embedding AI into the very fabric of the nation’s infrastructure, services, logistics, and security. Mr. Atul Rai, CEO and Co-Founder of Staqu Technologies, highlights that the emphasis on AI missions and research funding marks a clear shift from AI experimentation to large-scale deployment. “The government’s alignment of AI with national priorities like infrastructure and public services is setting up a robust ecosystem for real-world AI applications. This transition from theory to practical use will not only boost economic growth but also elevate India’s standing as a leader in the AI domain. Moreover, Rai stresses the importance of the government’s focus on skilling and education-to-employment pathways. These investments will ensure that the workforce is equipped to handle the growing demand for AI expertise. As AI becomes embedded across sectors, the solutions that translate research into practical applications will be crucial in enhancing productivity, safety, and operational efficiency.
Tax Reforms: Simplifying Compliance and Fostering Growth
In a bid to make India an even more attractive base for technology-driven businesses, the Union Budget has introduced key tax reforms that will benefit the IT sector and beyond. Notably, the safe harbour limit for IT companies has been raised from Rs 300 crore to Rs 2,000 crore, simplifying the tax compliance process and encouraging business growth. Mr. Girish Hirde, Global Delivery Head at InfoVision, expresses optimism about the reforms – Raising the safe harbour limit to Rs 2,000 crore is a game-changer. It will make tax and compliance processes much simpler and more predictable, enabling IT companies to focus on expansion and innovation. This change is not just for small or mid-sized companies but also for large firms, reducing the risk of litigation and uncertainty in tax obligations. However, it includes a tax holiday for foreign companies that operate data centres in India. This move creates an inviting environment for international investment. The tax holiday will encourage more global companies to build and scale their data centres in India, thereby enhancing the country’s digital infrastructure.
Empowering Startups and MSMEs with Capital for Innovation
The Union Budget has also provided a significant boost to India’s burgeoning startup and MSME ecosystem, earmarking Rs 10,000 crore as a growth fund to help these businesses scale, innovate, and create jobs. This is expected to further solidify India as a hub for technology-driven entrepreneurship. Mr. Satya Yeruva, Co-Founder & CEO of FinStackk, notes that this allocation could be the catalyst for transforming India’s startup ecosystem. The Rs 10,000 crore growth fund is a crucial step in empowering startups and MSMEs to access capital and resources needed to scale. It also reinforces India’s attractiveness as a stable base for technology-driven businesses. The emphasis on fostering entrepreneurship through direct funding and access to resources will create a strong foundation for long-term growth in India’s tech sector. By simplifying tax processes and offering targeted financial support to startups, India is reinforcing its commitment to nurturing homegrown innovation, positioning itself as a competitive player on the global tech stage.
Digital Infrastructure Backbone for AI Leadership
As the world races to establish a robust digital infrastructure to support the AI revolution, India is positioning itself to lead the charge. The Union Budget 2026-27 has made a bold move by recognizing data centres as critical national infrastructure—a necessary step in ensuring that the country can support AI growth at scale. Mr. Akshay Chhabra, CMD of 1Point1 Solutions Limited, sees this as a decisive shift. The recognition of data centres as critical infrastructure is a timely and essential move. It underscores the foundational role that digital infrastructure plays in supporting a thriving AI ecosystem. The proposed tax holiday for global cloud service providers operating data centres in India until 2047 signals India’s commitment to building a resilient and scalable digital backbone. This move will not only attract large-scale investments from hyperscalers and global cloud providers but will also accelerate the development of large-scale digital infrastructure. The incentives for cloud and hyperscale providers will increase capacity, improve talent readiness, and ensure that India remains at the forefront of the global digital economy. AI is no longer a future roadmap but it’s today’s operational reality. And with this budget, India has set itself up to be a global leader in a digital- and intelligence-driven economy.
The 2026–27 Union Budget is a pivotal moment for India’s tech industry, as it not only addresses the current needs of the ecosystem but also paves the way for future growth in AI, digital infrastructure, and global business collaboration. With these strategic investments, India is positioning itself to be a powerhouse in the digital economy—one that is ready to lead, innovate, and drive sustainable growth for the future.