Budget 2026 Tech Takeaways: AI, Electronics Manufacturing, and Digital Health Get Big Boost

India’s Union Budget 2026-27, presented on February 1, 2026, has placed technology and artificial intelligence (AI) at the heart of its growth strategy. Finance Minister Nirmala Sitharaman’s ninth consecutive budget signals a decisive pivot toward deep-tech leadership, positioning India as a global hub for innovation and digital infrastructure.

Key Highlights:

Electronics Manufacturing Push: The government has allocated ₹40,000 crore to the Electronic Component Manufacturing Scheme (ECMS), nearly doubling last year’s outlay. This aims to strengthen domestic supply chains and reduce reliance on imports.

Semiconductor Mission 2.0: The launch of ISM 2.0 marks a renewed push to establish India as a semiconductor powerhouse. Incentives will support chip fabrication units, packaging facilities, and R&D, addressing global supply chain vulnerabilities.

Data Centre Incentives: Data centres have been granted strategic infrastructure status, alongside tax holidays until 2047 for foreign companies setting up facilities in India. This is expected to attract global investment and enhance India’s digital backbone.

AI for Agriculture: The government introduced ‘Bharat Vistar’, a multilingual AI-powered platform to deliver tailored advisory services to farmers. This initiative integrates digital agriculture resources to improve crop yields and rural livelihoods.

IT Service Reforms: A common safe harbour margin of 15.5% has been introduced for IT services, with thresholds raised to ₹2,000 crore from ₹300 crore. This simplifies compliance and reduces litigation risks for IT firms.

Skilling & Innovation: Budget 2026 emphasizes AI-driven skilling programs, aiming to prepare India’s youth for jobs in emerging technologies. Innovation hubs will be set up to foster startups in AI, robotics, and clean tech.

Digital Public Infrastructure: Investments will also expand digital health, fintech, and smart governance platforms, ensuring technology benefits reach citizens directly.

Industry Impact:  
Analysts view these measures as a game-changer for India’s tech ecosystem, with semiconductors and AI expected to drive long-term growth. The combination of fiscal incentives, infrastructure support, and skilling initiatives could accelerate India’s transition from a “digital-first” to an “intelligence-first” economy.

Outlook:  
With global demand for semiconductors and AI solutions surging, India’s Budget 2026 lays the foundation for self-reliance and global competitiveness. The reforms are expected to boost investor confidence, create jobs, and position India as a leader in next-generation technologies.

Sources: Mint , India Today , WION/Union Budget Coverage , Business Standard Tech Desk , Financial Express Analysis