While presenting the Union Budget 2024-25, Nirmala Sitharaman, Minister of Finance and Corporate Affairs has proposed a budget of Rs 952.98 billion for the information technology and telecommunications sectors. The Union Budget 2025-26 paves the way for building next-gen digital services, robust infrastructure and self-reliance within India’s telecom ecosystem, with a notable investment of Rs 220 billion in the BharatNet Project aimed at improving broadband connectivity in Gram Panchayats and rural areas.
To support domestic manufacturing, the allocation for the Domestic Industry Incentivisation Scheme, including the Production-Linked Incentive (PLI) scheme, has been increased to promote value addition.
Additionally, Rs 200 billion has been earmarked for a private sector-led research, development, and innovation initiative, while Rs 20 billion is designated for the artificial intelligence (AI) Mission to establish a robust AI ecosystem through strategic programs and partnerships. Furthermore, India has allocated Rs 5 billion to create three Centres of Excellence (CoE) for AI in prominent educational institutions to enhance AI research and its application in the education sector. The budget also raises the investment and turnover thresholds for MSME classification to 2.5 and 2 times, respectively, promoting growth and competitiveness in the sector.
In presenting the Union Budget for 2025-26, Sitharaman proposed reducing the basic customs duty on carrier-grade ethernet switches from 20 per cent to 10 per cent, aligning it with non-carrier-grade ethernet switches. The allocation for Bharat Sanchar Nigam Limited (BSNL), a state-owned telecom corporation, is approximately Rs 342.57 billion for FY26, which is a 53 per cent decrease from the revised allocation of Rs 725.28 billion for FY25.
Further, the Department of Space has been allocated Rs 134.16 billion, an increase from the previous allocation of Rs 117 billion. Additionally, NewSpace India Limited (NSIL) has received Rs 10 billion to strengthen its operations.
Industry reactions:
Commenting on the budget, Manoj Kumar Singh, director general, Digital Infrastructure Providers Association (DIPA), said, “The Union Budget 2025-26 presents a comprehensive vision for accelerating India’s journey towards Viksit Bharat through transformative digital infrastructure development and economic reforms. As the Director General of Digital Infrastructure Providers Association, I am particularly encouraged by the government’s strategic initiatives that will catalyse growth across sectors. The reduction in basic customs duty on carrier-grade Ethernet switches from 20 per cent to 10 per cent, bringing them at par with non-carrier-grade switches, is a significant step that will resolve industry disputes while reducing infrastructure costs. This, combined with BharatTradeNet’s introduction as a unified digital platform, demonstrates the government’s commitment to building robust digital infrastructure and enhancing our global trade competitiveness. The budget’s focus on MSMEs is particularly noteworthy, with the enhanced credit guarantee cover from Rs 50 million to Rs 100 million for micro-enterprises, injecting an additional Rs 1.5 trillion credit over the next five years. The National Manufacturing Mission’s support for clean tech manufacturing, especially in EV batteries and solar panels, along with customs duty exemptions on 35 additional goods, showcases a clear push towards sustainable development and domestic manufacturing capabilities. The rationalisation of TDS rates and increased thresholds mark significant relief for taxpayers. The doubling of tax deduction limits on interest income for senior citizens to Rs 100,000 and the increase in TDS threshold on rent payments to Rs 600,000 annually reflect a citizen-centric approach. Furthermore, raising the income tax limit to Rs 1.2 million under the new tax regime will boost consumer spending power and economic growth. The comprehensive power sector reforms and increased state support for infrastructure development will strengthen the foundation needed for digital expansion, particularly in rural areas. The light-touch regulatory framework and emphasis on ease of doing business create an enabling environment for private sector participation and innovation. These progressive measures, coupled with the new Asset Monetisation Plan 2025-30, create a robust ecosystem for sustainable growth in the digital infrastructure sector. DIPA is committed to working alongside the government in realising the vision of a digitally advanced and prosperous India, ensuring that the benefits of digital transformation reach every corner of our nation.”
Meanwhile, Subhasis Majumdar, managing director, Vertiv, said, “The Union Budget 2025 marks a transformative milestone in India’s journey towards becoming a global leader in manufacturing, technology, and innovation. We welcome the Government’s renewed focus on manufacturing through the National Manufacturing Mission, a key initiative that positions India to lead on the global stage. By focusing on building domestic capacities, integrating into global supply chains, and forming industry facilitation groups, this mission is set to significantly boost businesses and propel the ‘Make in India’ vision forward. Moreover, the integration of Industry 4.0 will unlock new opportunities by harnessing the immense potential of our youth’s skills and talent, laying the foundation for a more competitive, self-reliant India. The Budget’s commitment to transformative reforms, particularly in the power sector, aligns perfectly with India’s ambition to enhance its global competitiveness. These efforts, coupled with a modern regulatory framework and a continued focus on ease of doing business, are vital to creating an environment where innovation and enterprise can flourish. This is a win for domestic production, a leap toward a greener future, and an essential step in establishing India as a global economic powerhouse. Furthermore, the strategic investment in skilling, AI, and technological innovation is a testament to India’s commitment to nurturing talent and maintaining its edge in the digital revolution. The establishment of National Centres of Excellence for skilling and the PM Research Fellowship scheme for IITs and IISc will ensure India remains at the forefront of global advancements in AI and deep tech. As we move forward, this budget sets the stage for a more dynamic, inclusive, and innovation-driven India—ready to lead the world in the digital and technological age.”
In addition, Hitesh Garg, vice president and India managing director, NXP Semiconductors, said, “The Union Budget 2025 continues to reinforce India’s ambition to be a global leader in technology, with initiatives focussed on driving self-reliant, advanced manufacturing as innovation. The launch of the National Manufacturing Mission is a key step accelerating the ‘Make for India, Make for the World’ vision. Its focus on clean technology and sustainability ensures long-term competitiveness in global markets. The government’s Rs 200 billion investment in private sector-led R&D, alongside the deep tech fund, is a strategic move to strengthen India’s leadership in AI, semiconductors, and next-gen manufacturing. The Rs 100 billion fund of funds for startups and enhanced SME/MSME credit facilities will continue to encourage entrepreneurship across the board, and in technology- led innovation, in particular. This, combined with existing policy-driven support for clean energy, will have a far-reaching impact on industries like semiconductors and automotive, accelerating EV adoption, enhancing chip design capabilities, and fostering broader technology advancements. The initiatives around lithium-ion batteries and other components that go into EV will drive up local innovation and manufacture not just of the finished product but also spur the development of a much-needed manufacturing ecosystem. The plan to establish a national framework for Global Capability Centres (GCCs) in tier 2 cities will help India reap the benefits of its current and continued investments in skills and higher education beyond the metros, thereby creating job local opportunities and curbing urban migration. There is focus on continuing to retain the skills advantage both in the medium and long term, with the establishment of the five National Centres of Excellence and the focus on increasing the student pool at five IITs, and the Atal Tinkering Labs initiative in Government schools across the country. At NXP Semiconductors, we see Budget 2025 catalysing deep tech innovation and sustainable growth, continuing to set the stage for India’s emergence as a global powerhouse. We are committed to collaborating with policymakers, startups, and industry leaders to drive India’s technological transformation.”
Additionally, Sunil Gupta, co-founder, chief executive officer and managing director, Yotta Data Services, said, “The Union Budget 2024 reinforces India’s ambition to emerge as a global technology powerhouse by driving AI, deep tech, and cutting-edge research. The Rs 5 billion investment outlay for three CoE for AI in education is a big step towards making AI-led learning mainstream. This will not only help in upskilling the AI talent pool in India and preparing the youth for the jobs of the future but also democratise access to high-quality education by enabling AI-driven solutions such as real-time language translation and personalised learning pathways. This is especially critical in a country where millions of students receive their education in their native languages and aspire to careers in sectors that primarily operate in these languages. Additionally, measures like the Deep Tech Fund of Funds and the 10,000 fellowships for tech research at IITs and IIScs under the PM Research Fellowship Scheme will help bridge the gap between education and employability while creating a robust pipeline for homegrown AI-led technological breakthroughs. By integrating AI into education at scale, India is not only addressing existing challenges in the education system but also equipping students with the digital and analytical skills necessary for the modern economy. Just as the IT boom positioned India as a global tech hub, this budget lays the foundation for long-term AI leadership by prioritising talent development. By fostering AI-driven learning, removing financial and linguistic barriers, and enabling large-scale skill-building, India is not just preparing for the future but actively shaping it—taking a decisive step toward global digital leadership.”
Furthermore, Swapna Bapat, Vice President and Managing Director, India and SAARC, Palo Alto Networks, said, “We strongly believe that innovation is the driving force behind sustainable progress. The Government of India’s Rs 5 billion investment to establish a Centre of Excellence in Artificial Intelligence for education marks a decisive step toward realising AI’s full potential. Equally critical is modernising and securing both legacy and emerging systems, supported by a workforce skilled in meeting the demands of an increasingly digitally connected world. We appreciate the government’s commitment to upskilling the young workforce for emerging technologies. The creation of national centres for skilling with global expertise under ‘Make for India’, alongside provisions for 10,000 fellowships for technological research in IITs and IISc, will play a pivotal role in bridging the talent gap and preparing professionals for the future of work. The India AI Mission presents vast opportunities for AI adoption yet it also highlights inherent security risks associated with it, as AI remains a double-edged sword. Initiatives like the IndiaAI Innovation Centre, IndiaAI FutureSkills, and Safe and Trusted AI exemplify a forward-looking approach to responsible AI implementation, reinforced by robust security measures. Together, these steps foster a secure, innovation-centric ecosystem that benefits both businesses and society.”
Also, Vishak Raman, vice president, Sales, India, SAARC, SEA and ANZ, Fortinet, said, “Viksit Bharat’ lays out a clear road map for developing the skills sets of our future workforce to accelerate growth with skilled labour and meaningful employment. The emphasis on scientific thinking is seeded at the school level with the setting up of Fifty thousand Atal Tinkering Labs to cultivate a culture of Innovation among young minds. This goes all the way to funding ten thousand fellowships at IITs and IISc for technology researchers at the highest level. Five National Centres of excellence in skilling with global expertise is a good example of private public partnership to ensure the best of curriculum for manufacturing. We also now have a fourth CoE in AI for education and this investment clearly outlines we need a pool of talent that will help us to exploit the potential of AI in various fields. We welcome the 50 per cent duty cut on switches for telecom as this will reduce the cost of secure networking for the service providers. The cybersecurity skills gap remains a major concern as we continue to struggle in securing our digital assets. In the area of cybersecurity training and upskilling we at Fortinet are at the forefront of addressing the skills gap and are closely working with CERT-IN and AICTE where 1,00,000 internship is on offer to professionals interested in starting a career in cybersecurity. IT and Technology Expertise will continue to drive economic growth with the Deep Tech Fund of Funds for start-ups supporting first time entrepreneurs to innovate and ideate new business opportunities. The four powerful budget engines chug along very nicely for Agriculture, MSME, Investment and Export growth taking everyone along on this journey of prosperity and resilience”
Meanwhile, Lt Gen AK Bhatt, director general, Indian Space Association (ISpA), said, “The announcement of the National Geospatial Mission shows the growing commitment of the government to use the downstream capabilities of the space tech sector. We welcome the announcement in the Union Budget to facilitate the modernisation of land records, urban planning, and design of infrastructure projects under this crucial mission it is good to see how the industry and the government have realised the importance of these emerging technologies. Even the Ex-ISRO Chairman Shri S. Somanath last year stressed the need to focus on developing downstream capabilities to generate demand and attract investments in upstream activities like satellite development and launch services in India’s space sector. According to the ISpA-nasscom-Deloitte report, the market for the downstream space tech segment is expected to reach ~$ 610 billion by 2031. The Budget’s focus on setting up National CoE for skilling is an exciting announcement which would help in upskilling our growing youth talent which is in dire need of these measures to compete on a global level. Also, the announcements around New Fund of Funds (FoF) for startups, setup of 50,000 Atal Tinkering Labs, an enhanced Credit Guarantee Scheme for Startups and the DeepTech Fund of Funds will give further push to the growing startup ecosystem including the space startups which are at a nascent stage.”
Further, Agendra Kumar, managing director, Esri India, said, “A big thank you to our finance minister for announcing several programs as part of the budget for 2025-26 to give a boost to the geospatial sector. The most important one is the setting up of the National Geospatial Mission to develop foundational geospatial infrastructure and data to facilitate land records modernisation, urban planning, and infrastructure design. The users in the government, private sector, and the industry have lived with the lack of good foundational data for a very long time. I believe this announcement will provide the necessary resources to create geospatial data that will serve as a foundation for social and economic development. By improving productivity across sectors such as agriculture, natural resources, energy generation and distribution, rural and urban initiatives, and governance, this effort will drive meaningful progress. Investment in research and development fuels economic growth, improves quality of life, and shapes the future. Rs 200 billion investment to drive private sector-led R&D and innovation, funds for Deeptech research, 10,000 fellowships under the PM Research Fellowship Scheme, and Rs 5 billion investment for a CoE in AI for education, are transformative steps to make India more competitive at the global level in terms of innovation and IP creation. Overall, the budget has set strong grounds for equipping India with the skills and resources necessary to navigate the evolving global landscape and achieve its vision of being a technologically advanced and prosperous nation.”
Additionally, Ashok Chandak, president, IESA, said, “the Union Budget 2025-26 presents several indirect benefits for the Electronics System Design & Manufacturing (ESDM) sector, aligning with key recommendations from IESA but has been muted on big announcements. Our focus on startups, R&D, skilling, export support, and continued semiconductor manufacturing incentives has been partially addressed through multiple schemes: the budget’s provisions for MSME support , start up’s ( 5 yr incorporation and Fund of Fund) CoEs in skilling and AI, and reduced Basic Customs Duty (BCD) on display panels and lithium-ion batteries will enhance local value addition in EVs and mobile manufacturing, IT Hardware, Export promotion schemes, Tax certainty for electronics manufacturing, establishing national manufacturing mission, Presumptive taxation on electronics manufacturing support, etc will also help step towards India’s position as a global electronics manufacturing hub and atmanirbhar Bharat. Further the Rs 200 billion allocated for R&D, along with 10,000 technology fellowships at IITs, will foster innovations and IPR development. revised IT slabs for the middle class will boost disposable income, thereby driving increased consumption and demand for consumer electronics. On the positive side, Overall Rs 219.45 billion has been allocated for the ESDM sector (under MeitY) which is a significant step compared to last FY. This includes 90 billion for Electronics PLI, 70 billion for Semiconductor and display manufacturing, 20 billion AI Mission, 12.59 billion for R&D, 5.75 billion for skilling , 7/12 billion for MSIPS/EDF/ Manufacturing Clusters, etc.”
