Union Budget 2026 Expectations: Industry Calls for AI, Deep-Tech Innovation, Talent Skilling & Policy Support

As India prepares to unveil the Union Budget 2026-27, the technology sector is looking to the government for a decisive policy push to accelerate artificial intelligence (AI), deep-tech innovation and digital infrastructure. Industry leaders believe the upcoming Budget will play a defining role in determining whether India can transition from being an AI consumer to a global technology innovator.

Union Budget 2026: AI Adoption and MSME Digitalisation in Focus

While India's digital transformation has gained momentum, the next phase of growth depends on scaling AI adoption across industries, particularly among micro, small and medium enterprises (MSMEs), where implementation remains limited compared to large corporations.

Aligning Budget Policy with National AI and Data Initiatives

Industry leaders also expect the Budget to align closely with national frameworks such as the IndiaAI Mission and the Digital Personal Data Protection Act. "As an AI-driven company which works closely with national and cyber security agencies, Innefu Labs sees significant potential in Budget support for areas such as Artificial Intelligence, Cybersecurity, Data analytics, and trusted data governance frameworks," said Mr. Tarun Wig, CO-Founder & CEO, Innefu Labs.

He further noted that a visionary Budget promoting indigenous deep-tech innovation would attract global technology players while enabling Indian companies to build secure and globally resilient solutions.

Tech Layoffs in 2025 Due to AI and Restructuring: Need to Address the Talent and Skilling Gap in Budget 2026

Talent development remains another key area of focus. The Budget should address the growing shortage of AI-skilled professionals despite strong economic growth projections.

"With India's real GDP projected to grow at a robust 7.4% in FY 2025-26, driven by strong growth in professional services, the Union Budget 2026 must now focus on converting this momentum into sustained global leadership," said Satish Sureddi, CFO, QualiZeal.

He added that with AI talent demand expected to cross 1.25 million by 2027, targeted investment in high-quality technical skilling would be critical for India's five-million-strong technology workforce.

AI-Driven Logistics and Supply Chain Modernisation

Expectations from Budget 2026 also extend to AI-enabled logistics and supply chain technologies.

"Accelerating the adoption of AI-enabled supply chain technologies, such as predictive demand forecasting, real-time route optimisation and intelligent warehouse automation, can significantly reduce logistics costs, improve delivery speed and enhance operational resilience," Mr. Umang Shukla, Co-founder and CEO, Edgistify, highlighted the need for policy support to drive adoption.

He said tax incentives for technology-driven solutions, GST relaxation for warehousing and support for hyper-local delivery infrastructure could simplify multi-state operations and boost efficiency.

Treating AI as Strategic National Infrastructure

Calling for a fundamental shift in how AI is viewed, Amit Kumar Tyagi, CEO of TrueReach AI, urged the government to treat AI as strategic national infrastructure rather than a standalone software segment.

"As India stands at the cusp of an AI revolution, the upcoming Union Budget must pivot from viewing AI as a mere software vertical to treating it as strategic national infrastructure, akin to power or telecom. At TrueReach AI, our expectation is a budget that transitions India from an AI consumer to a global innovation hub."

Tyagi highlighted the need to bridge India's R&D spending gap and called for the restoration of the 200% weighted deduction for research and development, particularly to support deep-tech startups with long gestation periods.

Compute Infrastructure, Capital and Manufacturing Incentives

Affordable access to high-performance computing remains a major challenge for AI startups. Tyagi said the sector requires a national 'Compute Credit' scheme, along with a customs duty holiday on critical AI hardware such as GPUs and TPUs.

He also emphasised the need to accelerate the Rs 20,000 crore Deep Tech Fund of Funds and extend the Production Linked Incentive (PLI) scheme to AI and robotics to promote domestic intellectual property development.

"As AI adoption accelerates globally, we hope the Union Budget 2026-27 takes a forward-looking view on enabling next generation agentic AI companies from India. Access to affordable high performance AI infrastructure will be critical, especially for firms building autonomous systems that require significant GPU capacity to scale responsibly and compete globally," Srikanth Chakkilam, CEO and Executive Director, Covasant Technologies.

He also called for regulatory sandboxes, clearer liability frameworks and export incentives to help Indian AI firms compete on the global stage.

Disclaimer: The views and recommendations expressed are solely those of the individual analysts or entities and do not reflect the views of Goodreturns.in or Greynium Information Technologies Private Limited (together referred as "we"). We do not guarantee, endorse or take responsibility for the accuracy, completeness or reliability of any content, nor do we provide any investment advice or solicit the purchase or sale of securities. All information is provided for informational and educational purposes only and should be independently verified from licensed financial advisors before making any investment decisions.