New Delhi: Ahead of the Union Budget for 2025-26, stakeholders in the Information Technology (IT) and Electronics sectors are advocating for various incentives to bolster Make in India initiatives. They are calling for increased investments in semiconductor manufacturing, funding for artificial intelligence research and development, tax relief for technology startups, infrastructure enhancements, skill development programs, and support for digital infrastructure, among other requests.
Union Finance Minister Nirmala Sitharaman is scheduled to present the budget on February 1 in Parliament.
Kapal Suresh Pansari, Managing Director of RP Tech, expressed his positive outlook, stating that the budget could facilitate sustainable growth and create new opportunities within the sector.
"Incentives for Make in India initiatives and infrastructure investments could greatly improve the ICT (Information and Communications Technology) supply chain. Furthermore, policies that promote innovation and skill development will be crucial in reinforcing India's status as a global technology leader," he noted.
The semiconductor industry is on the brink of substantial growth. Hareesh Chandrasekar, CEO and Co-Founder of AGNIT Semiconductors, emphasized the need for a 'green channel' to expedite customs clearance for semiconductor materials, thereby optimizing the manufacturing process.
He remarked, "Implementing measures such as lower GST on domestically produced components, reduced import duties on semiconductor-grade materials, and providing zero to low-interest funding for local companies can significantly boost the growth of indigenous semiconductor manufacturers."
Moreover, he supports the establishment of government-backed Venture Capital funds and incentives aimed at attracting NRI engineers from leading global semiconductor firms to fill existing talent shortages.
The future of the IT sector is significantly influenced by artificial intelligence, according to Narinder Kumar, CEO of TO THE NEW. He expressed optimism for substantial funding directed towards generative AI research and development, along with the creation of a regulatory sandbox to promote innovation and experimentation in AI.
Kumar also foresees enhanced export incentives for IT, especially in the realm of generative AI, to strengthen India's position in the global market.
On the infrastructure side, Nirmalya Chatterjee, Country VP and MD at Nemetschek Group, emphasizes the essential role of technology integration in fostering growth within the construction and infrastructure sectors.
He states, "The Union Budget FY26 is anticipated to emphasize infrastructure and construction as pivotal elements of economic growth, with a strong focus on increased investments and the integration of technology."
Industry leaders are particularly concerned about the pressing need for job creation and skill enhancement.
Gagan Arora, founder and CEO of Vertex Global Services, highlights the significance of skill development programs, especially in emerging technologies.
He asserts, "The government must prioritize job creation and skill development. Improving access to vocational training and higher education through targeted investments in skill development is a crucial aspect to monitor in the upcoming budget."
Investments in skill development and enhancement programs, along with addressing talent shortages through collaborations between the public and private sectors, are crucial for cultivating a workforce prepared for the future. Raja Lahri, Partner and Technology Industry Leader at Grant Thornton Bharat, emphasized that tax incentives and relief for startups and micro, small, and medium enterprises (MSMEs) will facilitate their growth, attract investment, and generate employment opportunities.
Mayank Maggon, Founder, CEO, and CTO of Techchefz Digital, noted that the forthcoming Union Budget is expected to include initiatives aimed at bolstering the growth of IT service SMEs. He suggested that the introduction of single-window clearances would streamline regulatory processes, allowing SMEs to concentrate on innovation and enhancing service delivery.
As India aims to establish itself as a global frontrunner in artificial intelligence, many industry leaders are looking to the Union Budget for definitive actions to promote AI innovation.
A S Rajgopal, CEO and Managing Director of NxtGen, highlighted the critical role of AI in driving growth across various sectors, advocating for a dedicated budget allocation for AI initiatives within government ministries. He expressed his expectation that the government will allocate specific funds for AI applications across all ministries, reinforcing the government's role as a model for the industry.
