Tech Explained: Sector-Wise Expectations for AI, Tech, Telecom, Mobility and Startups in Simple Terms

With India bracing for growth, the Union Budget 2026 arrives at a moment of strategic transition rather than a fiscal plan. The economy is balancing while eyeing to become a $5-trillion economy to position itself as a prime contender in advanced manufacturing, artificial intelligence (AI) and digital infrastructure.

Unlike earlier budgets that focused on post-pandemic recovery or inflation control, the budget 2026 is expected to be directional. Policymakers are burdened to signal long-term intent. This is particularly for technology leadership, industrial competitiveness, startup sustainability and next-generation infrastructure.

For businesses, investors and even consumers, the union budget is more than taxes or allocations. It is about where India is choosing to place its bets.

What Is the Union Budget and Why Does It Matter?

The Union Budget is the Government of India’s annual financial statement that outlines expected revenues and planned expenditures for the upcoming fiscal year. Under the guidance of the Finance Minister of India, a budget defines how public money will be raised and spent across sectors such as infrastructure, defence, social welfare, technology and industry.

Beyond sheer numbers, the budget is a policy signal. The incentives, exemptions, subsidies and regulatory changes within the budget determine:

• Which sectors attract private investment?
• How fast emerging industries scale?
• Whether India becomes a manufacturing hub or remains import-dependent?
• How innovation, research and entrepreneurship are rewarded?

In 2026, the role is more important as India negotiates a global shift in supply chains, intensified AI competition, and rising energy and climate commitments.

Also Read: Tamil Nadu Bets Big on Deep Tech with New ₹100 Crore Startup Policy

Why Budget 2026 Is Important for India’s Growth Plan?

Several structural themes merge with the budget 2026:

• Manufacturing scale-ups: India wants to move from assembly-led manufacturing to value-added production. This stands true for electronics, semiconductors and industrial automation.
• Digital infrastructure as core infrastructure: Data centres, telecom networks, cloud infrastructure and AI compute are no longer auxiliary sectors. They are now economic backbones.
• Startup ecosystem maturity: Indian startups are shifting from hyper-growth to sustainability, profitability and deep-tech innovation.
• Global competition in AI and Electronics: Countries are racing to localise AI models, chips and other important digital infrastructure.

On these grounds, the Union Budget 2026 is expected to be more about execution, incentives and capacity building rather than headline-grabbing scheme announcements.

Broader Expectations from Union Budget 2026: The Bigger Picture

Across industries, there are some expectations across sectoral boundaries:

• Higher capital expenditure (CapEx) to sustain growth
• Production-linked incentives (PLI) with sharper outcomes
• Tax clarity and simplification, especially for startups and technology firms
• R&D incentives to promote domestic innovation
• Skill development and talent channel, particularly in AI, electronics and advanced manufacturing
• Energy efficiency and sustainability-related incentives (data centres and telecom)

These agendas underpinned sector-specific demands outlined below.

Also Read: Uttar Pradesh Targets Semiconductor and GCC Investments with Fresh SOPs

Expectations: AI, Semiconductors, Electronics, Fintech, Embedded and more

AI and Digital Infrastructure: From Policy to Execution

Artificial Intelligence (AI) is one of the subjects to be closely watched during Budget 2026. The sector’s expectations roughly outline:

• Public investment in AI compute infrastructure
• Support for domestic AI models and datasets
• Skill development initiatives across academia and industry
• Defined governance frameworks for AI deployment and responsible use

AI is currently an important enabler, and India is poised to make progress in digital infrastructure, particularly in data centres.

“As India moves deeper into the 5G, cloud, and AI era, mission-critical digital infrastructure is fast becoming the backbone of every industry. In the upcoming budget, energy-efficient and resilient data centre ecosystems must be a clear priority”

-Pankaj Singh, Head of Data Centre & Telecom Business Solutions at Delta Electronics India

“Complementing sustainability-linked benefits and Make-in-India incentives for locally manufactured power, cooling and automation equipment will support OEMs invest with confidence and build a future-ready digital economy that is both low-carbon and globally competitive”, he added further.

He also suggested having stronger incentives for modular and containerised data centre deployments. It will accelerate the rollout of scalable core and edge facilities, while supporting advanced cooling technologies, including liquid-to-liquid and liquid-to-air coolant distribution systems.

Semiconductors and Electronics Manufacturing

Semiconductor ambitions of India should no longer belong to the books. With different fabrication and packaging proposals, Budget 2026 must focus on execution support over announcements. The major expectations include:

• Continuous budgetary boost for semiconductor fabrication and assembly units
• Incentives for the electronics component ecosystem and not just the final assembly stage
• Customs duty rationalisation for raw materials and dedicated equipment
• Policy clarity for long-term usage that attracts global chipmakers and suppliers

Electronics manufacturers seek predictable power tariffs, logistics support and faster clearances. This is because it matters more than direct subsidies.

Embedded-Tech and Industrial Electronics

As manufacturing modernises, embedded systems and industrial electronics are gaining prominence.

“Industrial automation is a key growth lever for India’s manufacturing competitiveness as the economy scales towards the $5-trillion milestone. Smart factories, AI-driven automation and human-machine collaboration will be central to this transition.”

-Dr Sanjeev Srivastava, Head of Industrial Automation, Delta Electronics India

He added that, ahead of the budget, stronger support for smart manufacturing incentives, R&D tax benefits and skill development programmes will help industries adopt next-generation technologies faster.

These measures not just improve efficiency and lower costs but also strengthen India’s position as a global manufacturing and automation curve.

Fintech

The fintech industry is high on hopes for policy stability in the Union Budget 2026. The major expectations include:

• Clearer tax treatment for digital lending and payment platforms
• Regulatory clarity on embedded finance and AI-related credit models
• Support for financial inclusion technologies

The focus must stay on mitigating risk-based regulation and not burden the sector with over-compliance.

Mobility: Electric Vehicles, Smart Transport and Logistics

India’s mobility narrative is moving from adoption to scale. Budget 2026 is expected to:

• Extend incentives for electric vehicles, most importantly, commercial fleets
• Encourage domestic battery manufacturers to recycle
• Support charging infrastructure across the country
• Finance smart logistics and digital transportation

Rather than imposing blanket subsidies, industry players expect targeted incentives related to localisation, efficiency and sustainability.

Startups: From Growth to Sustainability & Innovation

With the country celebrating 10 years of the ‘Startup India Scheme’, our entrepreneurial ecosystem is quite mature. Union Budget 2026 expectations tend to revolve around this shift:

• Simplification of capital gains and angel tax provisions
• Faster processing of tax refunds and compliance approvals
• Funding for deep-tech startups in AI, hardware and climate-tech
• Government procurement access for startups

Startups are also looking for steady capital frameworks for long-term innovation rather than short-term valuation raises.

Telecom: Bracing for 5G Expansion and Networking

Telecom operators and infrastructure providers are nearing a massive capital-intensive era. The expectations from the Budget 2026 are:

• Rationalisation of licence fees & taxes
• Support in-house telecom equipment manufacturers
• Declare incentives for rural and enterprise 5G deployment
• Have a clear policy and resolution on spectrum pricing and usage

The focus is on financial sustainability rather than aggressive expansion mandates.

Budget 2026 as a Strategic Signal

To sum up, Union Budget 2026 is less about short-term relief and more about long-term positioning. The choices about incentives, infrastructure and regulation will shape India’s determination across technology, manufacturing and digital services for the next decade.

For industries, the expectation is clear:

• A stable policy
• Execution support
• A credible blueprint

For the government, Union Budget 2026 offers an opportunity to reinforce India’s ambition, not just as a fast-growing economy, but as a technology-driven global player.