Technology companies anticipate that the Union Budget 2026–2027 would promote the growth of the AI ecosystem, encompassing innovation and digital infrastructure across industries, as well as offer market liquidity for its adoption.
Union Budget Focus on AI and Digital Infrastructure
On Sunday, Nirmala Sitharaman, the Finance Minister, will deliver the Budget to Parliament.
Artificial intelligence (AI) has been acknowledged as an economic strategy rather than a prestige technological race in the Economic Survey presented to Parliament on January 29. In order to foster cooperation and shared innovation, it presented a compelling case for a bottom-up, multi-sector-specific strategy based on open and interoperable technology.
🤖 AI Ecosystem Budget Priorities
- Focus Area: AI ecosystem expansion
- Policy Push: Innovation-led growth model
- Infrastructure: Digital platforms scaling
- Approach: Bottom-up sector strategy
- Systems: Open interoperable technology
- Goal: Shared innovation and adoption
Economic Survey View on AI Strategy
The survey, according to CP Gurnani, a former CEO of Tech Mahindra and co-founder and vice chairman of the AI company AIONOS, “brilliantly captures India’s AI momentum with India’s world-class talent, diverse data assets, and smart pivot to bottom-up innovation with smaller, domain-specific models that fit India’s reality perfectly.” “India’s way forward is exciting, which is to leverage our engineering strength to create affordable, human-centric AI that solves local problems first, then scales globally. This puts us in a position to lead and participate in the next wave of significant innovation,” Gurnani said.
Logistics and Applied AI Expectations
“Incentives for applied AI, advanced planning systems, and interoperable digital workflows will be essential to unlocking productivity gains across multimodal networks,” stated Suryansh Jalan, Chief Business Officer of FarEye, a software-as-a-service company that focuses on the logistics sector. The industry expects the budget to prioritize autonomous logistics orchestration as it is a crucial component of goods across the nation and affects every household.
“Targeted skilling for roles such as digital operations, control-tower management, and AI-assisted planning will be key to sustaining long-term competitiveness,” he said, adding that although logistics is expected to add nearly 10 million jobs by 2027, the focus must shift toward job productivity and technology readiness. The cumulative effect of ongoing policy emphasis, infrastructure investment, and digital enablement throughout the industry is shown in the most recent DPIIT-NCAER study, which recalculates logistics costs to 7.97% of GDP, according to Jalan.
🏭 Semiconductor & Telecom Incentive Needs
- Sector: Semiconductor manufacturing
- Demand: Scheme continuity support
- Need: Higher FY27 allocations
- Process: Faster incentive disbursement
- Telecom: 6G and AI R&D rewards
- Mechanism: Innovation-linked incentives
Digital Infrastructure and Intelligence Shift
“The progress made in AI, data platforms, and digital public infrastructure has laid a strong foundation; the next opportunity lies in scaling this intelligence into the physical world,” stated Piyush Jha, vice president and head for Asia Pacific at Hitachi Group IT firm GlobalLogic, who views the Union Budget as a turning point in the transition from digital-first to intelligence-first infrastructure.
Sameer Kanodia, managing director of Lumina Datamatics, said that he anticipates the Union Budget will concentrate on bolstering the digital and AI-driven infrastructure that supports publishing, information services, and the rapidly expanding retail and e-commerce sector.
AI, Automation and Cloud Investments
“Continued investments in cutting-edge technologies like artificial intelligence (AI), automation, and cloud platforms will be vital to enhancing efficiency across content production, digital publishing processes, and large-scale retail operations,” Kanodia said.
Semiconductor Industry Budget Expectations
The budget should now prioritize continuity, execution certainty, and long-term competitiveness, according to semiconductor companies, a crucial sector for developing AI infrastructure, particularly as numerous significant semiconductor and electronics projects enter the implementation phases.
The India Semiconductor Mission (ISM)-led Semicon India Program, Designed Linked Incentive (DLI), Production Linked Incentive scheme, and Electronics Component Manufacturing Scheme, according to chip makers’ industry body IESA President Ashok Chandak, have produced noticeable advancements with quicker approvals, significant committed investments, and a clear transition from announcements to actual implementation.
Execution Certainty and Tax Clarity
Higher budgetary allotments for approved projects in FY27, a streamlined, time-bound pari-passu payout process, and the continuation and enhancement of ISM 2.0 are among the main expectations. Electronics and semiconductors are long-gestation, capital-intensive industries. As crucial as incentives are tax clarity and predictable execution, according to Chandak.
Telecom Innovation Linked Incentives
Telecom equipment manufacturer HFCL anticipates actions to transform the nation’s advantage in telecom infrastructure into long-term technical leadership. “The next Budget may expedite this transformation by creating a targeted Innovation-Linked Incentive (ILI) mechanism.” According to Mahendra Nahata, managing director of HFCL, “This program must be carefully designed to reward R&D spending and patent development in 6G, AI, and defense technologies, the key trio of future strategic might.”
Frequently asked questions
1.What do IT companies anticipate from the 2026–2027 budget?
Tech companies anticipate increased financing mechanisms tied to innovation, digital infrastructure, R&D incentives, and the expansion of the AI ecosystem.
2. Why is this year’s budget heavily focused on AI?
The Economic Survey encouraged sector-specific, bottom-up AI development utilizing open platforms and recognized AI as a driver of economic growth.
3. What is the budget’s desired outcome for semiconductor companies?
They demand consistent tax and incentive policies, more budget allocation, quicker approvals, and the continuance of ISM and PLI programs.
4. How will AI help supply chains and logistics?
AI can boost efficiency and save costs by enhancing planning, automation, control-tower operations, and multimodal coordination.
5. What incentives are deep-tech and telecom companies asking for?
They are asking for Innovation-Linked Incentives related to R&D expenditures and the development of patents in defense, 6G, and AI technology.
Conclusion
The IT sector views Budget 2026–2027 as a pivotal moment that will shift India’s development from digital to intelligence. India can bolster its position as a worldwide leader in technology with targeted AI incentives, semiconductor assistance, financing for digital infrastructure, and R&D prizes.
Current momentum might be transformed into long-term innovation and competitiveness with the support of a solid, execution-focused policy environment.
Disclaimer
Disclaimer: This content is for informational purposes only. Budget expectations and industry views may change after official announcements. Always verify details from government and official sources.
