AI, Semiconductors, Data Centres Take Centre Stage

Budget 2026 includes several announcements linked to technology policy, infrastructure, and digital systems. The measures focus largely on supply-side capability, regulatory clarity, and long-term infrastructure planning.

Presented by Nirmala Sitharaman, the budget does not introduce broad consumer-facing technology schemes. Instead, it addresses specific sectors such as semiconductor manufacturing, artificial intelligence applications, data centres, and IT services.

These provisions indicate how technology is being incorporated into economic and administrative planning.

Semiconductor manufacturing gets continued policy backing

A central announcement is India Semiconductor Mission 2.0, with an allocation of ₹40,000 crore. The programme aims to support domestic semiconductor manufacturing and related supply chains.

The budget does not outline new fabrication timelines or capacity targets. It reiterates support for existing policy frameworks intended to reduce reliance on imports and support electronics manufacturing.

Semiconductors are referenced as inputs across multiple industries, including electronics and computing.

Electronics components receive higher funding

Budget 2026 increases funding for the Electronics Component Manufacturing Scheme to ₹40,000 crore, doubling earlier allocations.

The scheme supports domestic production of components used in electronic devices. These include parts required for assembly, sub-systems, and design-linked manufacturing. The objective is to reduce imports and strengthen local supply chains.

The budget links component manufacturing to job creation in assembly and product design, without announcing consumer pricing measures.

How artificial intelligence features in Budget 2026

Artificial intelligence appears in different contexts rather than as a single programme. The government announced the formation of a panel to study the impact of AI on jobs and skill requirements.

The budget also introduces Bharat Vistar, a multilingual AI-based tool designed to provide agricultural information to farmers in regional languages. The focus remains on access to information rather than automation.

No separate funding envelope for AI research or deployment was specified.

AVGC labs expand across schools and colleges

Budget 2026 outlines a nationwide expansion of Animation, Visual Effects, Gaming, and Comics (AVGC) labs. The labs will be set up by the Indian Institute of Creative Technologies in 15,000 secondary schools and 500 colleges. The stated aim is to train two million professionals by 2030.

The initiative focuses on skills linked to animation, gaming, and digital content creation.

Data centres and IT services measures

Budget 2026 extends tax holiday provisions for data centre investments until 2047. It also introduces safe harbour rules covering IT and IT-enabled services, grouping them under a common compliance framework.

These measures are intended to simplify taxation and reduce disputes. They apply primarily to enterprise technology providers, cloud services, and software exporters. There are no changes related to consumer internet services.

What Budget 2026 does not address

Budget 2026 does not announce incentives for consumer electronics, smartphones, or personal computing devices. There are no changes to import duties or pricing-related measures in these categories.

Broad digital skilling programmes also receive limited attention, with a narrower focus on specific sectors.