Union Budget 2026: What Industry Leaders Expect
As Finance Minister Nirmala Sitharaman prepares to table the Union Budget 2026-27 tomorrow, February 1, India’s technology and industrial leaders are calling for a shift from foundational growth to “scale and trust.”
With India’s real GDP projected to grow at a robust 7.4%, the industry pulse suggests that the next phase of the “Viksit Bharat 2047” roadmap will be defined by how effectively the government institutionalizes intelligence and resilience.
From the corridors of AI startups to the shop floors of global manufacturing hubs, the consensus is clear: the budget must move beyond isolated pilots to create a “Trust Stack” that makes innovation standardized and defensible.
Amit Das, Founder & CEO at Think360.ai
“India Stack remains one country’s biggest structural advantage, open digital rails for identity, payments and data that allow innovation to compound at a population scale. “We’ve already seen what this looks like in outcomes,” with UPI processing 21.6 billion transactions worth nearly ₹28 lakh crore in December 2025 alone. Scale is no longer aspirational; it’s operational.” The next logical leap is to build the trust layer on top of India Stack. A national “Trust Stack” that makes AI-led systems standardised, auditable, and outcome-linked.
From an AI founder’s lens, bridging today’s growth to Viksit Bharat 2047 is not about isolated pilots or sporadic innovation. It requires institutionalising intelligence, embedding data-driven decisioning into the core of public and financial systems so inclusion is standardised, measurable and defensible by design, not left to discretion or intent.
The Digital Personal Data Protection (DPDP) framework is the backbone of this trust layer. With the DPDP Rules notified in November 2025 and an 18-month phased compliance window, “Budget 2026 should prioritise readiness” funding privacy-by-design capabilities, consent operations at scale, and verifiable control frameworks. Regulatory friction is not inevitable; “clarity always beats complexity,” especially where DPDP intersects BFSI and risks creating duplicate compliance.
In a volatile geopolitical environment, India’s digital strategy must be resilience-first; if not efficiency-first. That requires sustained investment in domestic IP creation, active protection of strategic data assets, and clear guardrails around data and algorithm sovereignty, so India’s digital public infrastructure remains globally competitive without compromising security or autonomy.
Finally, AI infrastructure must be matched with cyber resilience. In 2025 alone, CERT-In handled over 29 lakh cyber incidents, a clear reminder that threat volumes are already at scale. As IndiaAI expands the national compute pool to over 34,000 GPUs, the attack surface grows just as rapidly, which means security and governance cannot be treated as an afterthought. Secure-by-default architectures, zero-trust access models and continuous monitoring must be foundational, so innovation scales safely, credibly and sustainably.”
Andre Eckholt, Managing Director – Hettich India, SAARC, Middle East & Africa
“As Make in India enters a decisive phase, the Union Budget 2026 presents an important opportunity to further strengthen India’s manufacturing sectors. To take this momentum to the next level, the Budgetshould expand and refine the PLI framework across key industries and extend incentive timelines to provide greater certainty for long-gestation manufacturing investments. A supportive and predictable policy environment can accelerate local manufacturing and reinforce India’s position as a reliable production hub for both domestic and export markets. Sustained policy support under the Make in India initiative will enable domestic manufacturers to scale up, innovate, and compete globally.”
Ankur Bansal, Managing Director, BlackSoil
“The upcoming Budget must recognise that India’s funding needs have evolved beyond a pure equity-led model. What the ecosystem now needs is policy support for blended capital where venture debt and alternative credit work alongside equity. The focus should be on execution over announcements, with frameworks that enable cash-flow-aligned, sector-specific credit and stronger risk-sharing, so MSMEs and growth-stage startups can access flexible, non-dilutive capital that supports sustainable scale.”
Tarun Wig, CO-Founder & CEO, Innefu Labs
With the Union Budget 2026-27 round the corner, there is a certain strong anticipation across the technology ecosystem for decisive encouragement towards artificial intelligence and deep-tech innovation. While India’s digital journey has achieved a certain degree of momentum, the next phase of growth will depend on how effectively these emerging technologies can be scaled across sectors-especially among MSMEs, where the pace of adoption still lags behind large enterprises.
Such targeted policy interventions could be in the form of tax incentives for AI-led solutions, enhanced access to secure cloud infrastructure, and a wider reach of skilling programmes, so as to modernize operations of MSMEs, enhance their cybersecurity resilience, and create more employment. As an AI-driven company which works closely with national and cyber security agencies, Innefu Labs sees significant potential in Budget support for areas such as Artificial Intelligence, Cybersecurity, Data analytics, and trusted data governance frameworks.
It is also expected to articulate the budget policies in line with national initiatives like the IndiaAI Mission and the Digital Personal Data Protection Act, thereby instilling growing confidence among investors, with a commitment to responsible and ethical innovation. A visionary Budget that promotes indigenous innovations in deep tech will not only help to attract technology giants worldwide but will also enable Indian corporations to develop technology solutions with a global resilience and security-focused approach.
Satish Sureddi, CFO, QualiZeal
“With India’s real GDP projected to grow at a robust 7.4% in FY 2025–26, driven by strong growth in professional services, the Union Budget 2026 must now focus on converting this momentum into sustained global leadership. At QualiZeal, we see an urgent need to address the structural gap in talent supply. With demand for AI-skilled professionals expected to cross 1.25 million by 2027, the Budget must prioritise high-quality technical skilling for India’s over 5 million-strong tech workforce.
While over ₹1.75 lakh crore in investments under the PLI scheme has helped anchor India’s manufacturing base, the next frontier is IP-led innovation. To bridge the gap between India’s current R&D spending of around 0.6–0.7% of GDP and global benchmarks, the Budget should introduce targeted innovation-linked incentives. Equally critical is national resilience. With climate-related risks posing a growing threat to economic output and agriculture continuing to support around 46% of the workforce, integrating digital engineering into green infrastructure and supply chain modernisation is no longer optional. It is a core economic imperative.”
Raju Kumar, Partner and Energy Leader – Tax, EY India
“Budget Expectations: As we approach Budget 2026, there is a strong expectation for a transformative approach to India’s clean energy ecosystem. The focus is shifting from mere capacity addition to enhancing system readiness, with key priorities including accelerated investments in grid modernization and large-scale energy storage solutions. A dedicated climate-finance facility is anticipated to attract private capital into green technologies, alongside incentives for bioenergy, electric mobility, and clean transportation initiatives.
Key issues: Despite these promising developments, the sector continues to grapple with challenges, including ongoing curtailment and persistent financial strain within DISCOMs. The limited bankability of storage solutions and other innovative technologies further undermine the sector’s viability. High upfront capital requirements, coupled with policy uncertainties and complex tax regulations, create substantial obstacles to growth.
Suggestions: To address these pressing issues, targeted tax incentives, such as accelerated depreciation benefits for green energy assets, will be essential. Additionally, stronger linkage with DISCOM reforms, further GST rationalization, and simplified tax structures and policy-certainty for energy transition investments are crucial.
Benefit for the industry: Implementing these measures could lower power costs, bolster investor confidence, and accelerate the adoption of new technologies, ultimately fostering a reliable, affordable, and resilient energy transition aligned with India’s long-term sustainability goals.”
Amit Kumar Tyagi, CEO, TrueReach AI
“As India stands at the cusp of an AI revolution, the upcoming Union Budget must pivot from viewing AI as a mere software vertical to treating it as strategic national infrastructure, akin to power or telecom. At TrueReach AI, our expectation is a budget that transitions India from an AI consumer to a global innovation hub.
First, to bridge the R&D gap—where India’s 0.7% GDP spend lags the 1.93% global average—we urge the restoration of the 200% weighted deduction for R&D. This is vital for deep-tech startups facing long-gestation cycles. Furthermore, democratizing AI requires a national ‘Compute Credit’ scheme and a 3-5 year customs duty holiday on critical hardware like GPUs and TPUs. Without affordable access to the ‘physical’ backbone of AI, Indian startups remain at a competitive disadvantage.
Capital remains the third pillar. Accelerating the ₹20,000 crore Deep Tech Fund of Funds will provide the patient, long-term capital necessary to build foundational models. We also hope to see the PLI scheme extended to AI and Robotics, incentivizing domestic IP over foreign licensing.
Finally, we must solve for ‘Data and Talent.’ Establishing a structured India Dataset Platform for anonymized data and offering tax incentives for corporate upskilling are non-negotiable if we are to meet the demand for 1 million AI professionals by 2026. By simplifying compliance through a single-window system, the government can empower founders to focus on building world-class technology rather than navigating regulatory hurdles.”
Srikanth Chakkilam, CEO and Executive Director, Covasant Technologies
“As AI adoption accelerates globally, we hope the Union Budget 2026–27 takes a forward-looking view on enabling next generation agentic AI companies from India. Access to affordable high performance AI infrastructure will be critical, especially for firms building autonomous systems that require significant GPU capacity to scale responsibly and compete globally. Targeted R&D tax credits and accelerated depreciation for AI hardware would significantly strengthen India’s innovation ecosystem.
We would also welcome the creation of regulatory sandboxes and clearer liability and data flow frameworks to enable companies to test autonomous agents in a controlled and compliant manner. Finally, public procurement opportunities for Indian AI firms, export incentives, and AI upskilling programs can help position India as a global hub for enterprise grade Agentic AI.”
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