Budget 2026 technology initiatives expectation: Semiconductors, IndiaAI expansion, and AI push

India’s Finance Minister Nirmala Sitharaman is expected to present the Union Budget 2026 on Sunday, February 1, 2026. The announcement is said to consist of several crucial budget allocations, new initiatives, and policy measures for the financial year 2026-27. However, this year, technology is expected to be the primary focus to drive India’s "Viksit Bharat" vision. 

Now with Artificial Intelligence (AI) heavily driving the growth in the stock market, investors, companies, and the tech sector have high expectations for government support and initiatives. Hence, this year’s key focus of the budget is expected to revolve around AI, Semiconductors, Data Centres, and Deep-Tech Startups. Here’s what we can expect during Budget 2026, from the tech perspective.

How does Budget 2026 support AI and emerging technologies?

IndiaAI Mission: With Budget 2026, Sitharaman is expected to announce increased funding for the IndiaAI Mission. The government may allocate a budget to set data-centre-style system containing 18,000 to 30,000 GPUs that will benefit domestic startups. We can also expect announcements surrounding new national AI centres focusing on education and healthcare.

Electronics and semiconductor sector: We also expect a boost in electronics and semiconductor manufacturing in the country, and could also announce support for existing initiatives for fabrication and packaging. Furthermore, we can also see duty waivers on critical minerals like lithium and cobalt for machinery required for chip making. Lastly, we, the Design Linked Incentive (DLI), may get greater support as well. 

Artificial Intelligence and data centres: According to a MoneyControl report, India plans to attract great global investment for its AI ecosystem. The publication quoted a senior government official saying, “There is an immense opportunity in India for investors. We saw that in 2025, with the announcement of $15 billion investment by Google for its AI hub (data centre and fibre-optic network) in Andhra Pradesh.”