Tech Explained: Here’s a simplified explanation of the latest technology update around Tech Explained: Insights From Last Budget That May Frame India’s 2026 Budget Focus in Simple Termsand what it means for users..
Ashwini Vaishnaw presenting first made-in-India chips to PM Modi in September 2025 (X/Ashwini Vaishnaw)
Hyderabad: Finance Minister Nirmala Sitharaman will present a record ninth consecutive budget today, on February 1, 2026, which is expected to contain reform measures aimed at shoring up economic growth amid a volatile geopolitical situation. Last year, the minister announced a change in the income tax slabs, effectively eliminating income tax for individuals earning up to Rs 12 lakh annually.
Amidst major announcements targeting agriculture, MSMEs, investment, and exports, the budget also addressed sectors such as space, electric vehicles, artificial intelligence, and clean energy. The government is expected to follow up on these areas this time as well, alongside its push for green energy and emerging technologies like artificial intelligence. Let’s take a look at insights from the last budget that provide a window into the expectations for the Union Budget 2026.
Push to India’s space sector
The Union Budget last year allocated Rs 13,415 crore to the Department of Space (DoS), increasing its budget from earlier Rs 11,725 crore. The allocation included Rs 6,103 crore capital outlay for Space Research, facilitating ambitious projects, including satellite launches and deep-space missions, which reflected in the report card of the Indian Space Programme.
In the year 2025, the Indian Space Research Organisation (ISRO) marked around 231 accomplishments, including missions, ground tests, and technology demonstrations, which include 100th mission from Sriharikota, autonomous docking and undocking demonstration (SPADEX Mission), first joint ISRO-NASA mission (NISAR), heaviest satellite launch from India (Bluebird Block-2 Mission), accelerated focus on Gaganyaan programme on the back of Axiom-4 mission, and much more.
Boost to battery manufacturing for EVs and smartphones
The Union Budget 2025 proposed to cut duty on capital goods used in lithium-ion battery production, hoping to enhance domestic manufacturing of lithium-ion batteries, crucial for electric vehicles (EVs) and mobile phones. “To the list of exempted capital goods, I propose to add 35 additional capital goods for EV battery manufacturing, and 28 additional capital goods for mobile phone battery manufacturing,” Nirmala Sitharaman said.
Sitharaman also announced setting up the National Manufacturing Mission to cover small, medium, and large industries for furthering the “Make in India” initiative. The mission aimed at supporting Clean Tech manufacturing to help improve domestic value addition and build an ecosystem for solar PV cells, EV batteries, motors and controllers, electrolysers, wind turbines, very high voltage transmission equipment, and grid-scale batteries, the minister said.
Nuclear and renewables
The Union Budget 2025 also announced a Rs 20,000 crore Nuclear Energy Mission, aimed at enhancing India’s nuclear energy capabilities. It included the development of small modular reactors (SMRs) by 2033 and a significant increase in nuclear energy production by 2047, aiming to achieve a capacity of 100 GW.
The government also confirmed plans to allow private players in the nuclear energy production sector in the hopes of accelerating the development of such projects for a steady increase in clean energy generation. For active participation of the private sector in this area, amendments to the Atomic Energy Act and the Civil Liability for Nuclear Damage Act will be taken up, Sitaraman said at the time.
The push for renewables continued throughout the year 2025. The latest Economic Survey, presented in Parliament on Thursday by Union Finance Minister Nirmala Sitharaman, claims that India has already surpassed the target of 50 per cent non-fossil power mark, reaching 51.93 per cent at the end of December 2025, supported by record annual renewable energy additions.
During 2025-26, a total of 38.61 GW of renewable energy capacity has been installed in the country, which includes 30.16 GW of solar power, 4.47 GW of wind power, 0.03 GW of bio-power and 3.24 GW of hydro power.
Boost to key technology projects
In last year’s budget, the Finance Minister announced 10,000 fellowships for tech research at the Indian Institute of Technology (IIT) and the Indian Institute of Science (IISC). The budget also included a boost to the budget for key technology projects, including enhanced allocation for production-linked incentives (PLI) schemes for mobile phones, IT hardware, semiconductor schemes, and IndiaAI Mission, by about 84 per cent to Rs 18,000 crore.
Electronics manufacturing under PLI: Notably, the PLI scheme received the largest allocation, amounting to Rs 8,885 crore—giving a major boost to manufacturing across multiple priority sectors, including electronics (mobiles), pharmaceuticals, automobile components, telecom, solar PV modules, and more.
According to the latest Economic Survey, the PLI scheme has attracted investments of over Rs 2 lakh crore since its launch in 2020. By September 2025, it had generated incremental production and sales worth more than Rs 18.7 lakh crore, created over 12.6 lakh direct and indirect jobs, and boosted exports beyond Rs 8.2 lakh crore.
India makes strides in semiconductors: The allocation for semiconductor projects, announced in the Union Budget 2025, more than doubled to Rs 2,499.96 crore for the 2025-26 fiscal year. The budget also increased the allocation for compound semiconductors, sensors, chip assembly, testing, and packaging units by 56 per cent, raising it to Rs 3,900 crore.
In 2025, India achieved major milestones in its semiconductor mission, headlined by the presentation of the first “Made in India” chips, including the 32-bit Vikram processor, at Semicon India 2025. The country also established advanced 3nm design centres in Noida and Bengaluru, approved 10+ projects with over Rs 1.60 lakh crore in investment, and shifted towards silicon carbide fabrication.
IndiaAI Mission: The funding for the IndiaAI Mission also increased significantly, rising more than 11-fold to Rs 2,000 crore. Under this mission, the country plans to build domestic large language models (LLMs) and release them at affordable costs. Additionally, the funding for the Ministry of Electronics and IT has increased by approximately 48 per cent, reaching Rs 26,026.25 crore for the 2025-26 fiscal year. Earlier this year, the IndiaAI Mission empanelled another 16,000 Graphics Processing Units (GPUs), bringing the tally to 34,333—making its current GPU capability more than three times the mission’s initial target.
CoE in AI for Education: As part of the Union Budget 2025, Sitharaman also announced the establishment of a new Centre of Excellence (CoE) in Artificial Intelligence (AI) for Education. Backed by a budget allocation of Rs 500 crore, the CoE in AI for Education aims to foster AI research and enhance its application in the education sector.
“Artificial Intelligence is revolutionising industries across the globe, and India must take the lead in AI research and applications. The proposed Centres of Excellence will serve as hubs for innovation, training, and deployment of AI-driven solutions in the education sector,” Sitharaman said in her speech.
Notably, the new CoE in AI for Education is an extension to the three established Centres of Excellence in AI, focusing on Agriculture, Healthcare, and Sustainable Cities, with a total financial outlay of Rs 990 crores from FY 2023-24 to FY 2027-28.