Tech Explained: Here’s a simplified explanation of the latest technology update around Tech Explained: Budget 2026: Tech industry calls for AI ecosystem development, digital infrastructure in Simple Termsand what it means for users..
India’s technology sector is looking to the Union Budget 2026-27 to advance the artificial intelligence (AI) ecosystem, drive innovation, and expand digital infrastructure while ensuring market liquidity for AI adoption across industries.
Finance Minister Nirmala Sitharaman is scheduled to present the Budget on Sunday, February 1, in Parliament.
The Economic Survey presented in Parliament on January 29 identified AI as an economic strategy rather than a prestige technology race. The survey advocated for a bottom-up, sector-specific approach based on open and interoperable systems to encourage collaboration and shared innovation.
CP Gurnani, former Tech Mahindra CEO and Co-Founder and Vice Chairman of AI firm AIONOS, said the Survey 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 challenges first, then scales globally. This positions us not just as participants, but as leaders in the next wave of meaningful innovation,” Gurnani said.
Logistics SaaS company FarEye stated the industry anticipates Budget measures to enhance reliability and global competitiveness, with priority given to autonomous logistics orchestration as a critical component affecting goods movement and households nationwide.
“Incentives for applied AI, advanced planning systems, and interoperable digital workflows will be essential to unlocking productivity gains across multimodal networks,” Suryansh Jalan, CBO at FarEye said.
Jalan noted that while logistics is projected to add nearly 10 million jobs by 2027, focus must shift toward job productivity and technology readiness.
“Targeted skilling for roles such as digital operations, control-tower management, and AI-assisted planning will be key to sustaining long-term competitiveness. The latest DPIIT-NCAER report recalibrating logistics costs to 7.97% of GDP reflects the cumulative impact of sustained policy focus, infrastructure investment, and digital enablement across the sector,” Jalan said.
Hitachi Group IT firm GlobalLogic views the Union Budget as crucial for transitioning from digital-first to intelligence-first infrastructure.
“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,” Piyush Jha, Vice President and Head for Asia Pacific, GlobalLogic, said.
Sameer Kanodia, Managing Director at Lumina Datamatic, said that he expects the Union Budget to focus on strengthening digital and AI-led infrastructure that underpins knowledge services, publishing, and the fast-growing retail and e-commerce ecosystem.
“Continued investments in advanced technologies such as AI, automation, and cloud platforms will be critical to improving productivity across content creation, digital publishing workflows, and large-scale retail operations,” Kanodia added.
Semiconductor manufacturers, essential for AI infrastructure development, want the budget to prioritise continuity, execution certainty and long-term competitiveness as major semiconductor and electronics projects enter implementation phases.
Ashok Chandak, President of chip makers industry body IESA, said the India Semiconductor Mission (ISM)-led Semicon India Program, Designed Linked Incentive (DLI), Production Linked Incentive scheme and Electronics Component Manufacturing Scheme have delivered tangible progress, with faster approvals, large committed investments and visible movement from announcements to on-ground execution.
“Key expectations include continuity and strengthening of ISM 2.0, higher budgetary allocations for approved projects in FY27, and a simplified, time-bound pari-passu disbursement mechanism. Semiconductors and electronics are capital-intensive, long-gestation sectors. Tax certainty and execution predictability are as important as incentives,” Chandak said.
Telecom equipment manufacturer HFCL anticipates measures to transform the country’s telecom infrastructure advantage into lasting technological leadership.
“The forthcoming Budget can catalyse this transition by introducing a targeted Innovation-Linked Incentive (ILI) mechanism. This program needs to be precisely engineered to reward R&D expenditure and patent generation in 6G, Artificial Intelligence, and Defence Technologies, the core triad of future strategic power,” Mahendra Nahata , Managing Director at HFCL said.