When Union Finance Minister Nirmala Sitharaman of India presented the Union Budget 2026–27 on February 1, it became clear that this year’s financial roadmap is not only about fiscal numbers, it is also about shaping the infrastructure of India’s digital future.
The India Budget 2026 sends a strong and confident message: India wants to lead in the next phase of global growth, and that leadership will be built on AI, cloud, data centres, semiconductors, and cybersecurity.
What stands out in Budget 2026 is the long-term thinking. Instead of short-term incentives or fragmented digital schemes, the government is laying down policy signals that stretch decades ahead, a rare and important move in the technology sector.
Budget 2026 Recognises Digital Infrastructure as Economic Infrastructure
For years, digital growth was often discussed as an enabler. In cyber budget 2026, digital infrastructure is being treated as core infrastructure, just like roads, railways, or energy.
Union Minister for Electronics and IT Ashwini Vaishnaw rightly pointed out that AI data centres are now part of the foundation layer of modern economies. Without compute power, cloud capacity, and reliable digital networks, AI ambitions remain theoretical.
India already has nearly USD 70 billion in investments underway in this space, with another USD 90 billion announced. That alone reflects how quickly the global market is betting on India’s data centre potential. But budget 2026 goes further.
The Tax Holiday Till 2047 Is a Bold Signal
One of the most defining announcements in India Budget 2026 is the proposed tax holiday till 2047 for foreign cloud companies providing services globally using Indian data centres.
This is more than a tax incentive — it is a strategic invitation.
By offering policy clarity over two decades, India is telling global cloud players: build here, scale here, and serve the world from here.
In a world where cloud infrastructure is becoming as geopolitically important as energy supply chains, this move positions India as not just a consumer of cloud services, but a serious global hosting hub.
The safe harbour provision of 15% on cost further strengthens confidence for companies operating through related entities.
This long-term stability may prove to be one of the smartest digital policy bets India has made in years.
IT Services Get the Relief They Have Long Needed
India’s IT services industry has always been a powerhouse, with exports now exceeding USD 220 billion.
Yet, the sector has often faced complexity in tax compliance and transfer pricing frameworks. Budget 2026–27 addresses this in a practical way.
By grouping software development, IT-enabled services, KPO, and contract R&D under one unified category — Information Technology Services — the government is acknowledging how interconnected these segments truly are.
The proposed safe harbour margin of 15.5% and the jump in threshold from Rs. 300 crore to Rs. 2,000 crore is not just a technical reform. It reduces friction, encourages growth, and allows companies to focus more on innovation than paperwork.
Even more importantly, approvals through an automated, rule-driven process remove uncertainty — something businesses value as much as incentives.
Semiconductor Mission 2.0 Reflects Strategic Continuity
The announcement of India Semiconductor Mission (ISM) 2.0, with an allocation of Rs. 1,000 crore, reinforces that India is serious about building supply chain resilience.
Semiconductors are no longer just an industrial component — they are a strategic necessity.
ISM 2.0’s focus on full-stack Indian IP, equipment production, and skilled workforce development reflects a long-term push toward self-reliance, not isolation.
It is about India becoming a meaningful contributor to global technology manufacturing, not just an importer.
Electronics Manufacturing Momentum Is Clearly Building
The expansion of the Electronics Components Manufacturing Scheme (ECMS), with the outlay proposed to rise to Rs. 40,000 crore, shows that India wants to capture the manufacturing opportunity created by global supply chain shifts.
Investment commitments already exceeding targets indicate that industry is responding.
This is one area where Budget 2026 could create a multiplier effect — across jobs, exports, innovation, and ecosystem development.
Industry Response Highlights the Bigger Picture
The technology and cybersecurity industry has largely welcomed the direction of Budget 2026, especially its long-term focus on cloud infrastructure, AI readiness, and digital resilience.
Pinkesh Kotecha, Chairman and CEO of Ishan Technologies, noted that the Budget puts strong backing behind India’s infrastructure ambitions.
“Union Budget 2026 puts hard numbers behind India’s digital infrastructure ambition,” he said, pointing to the tax holiday till 2047 for global cloud providers using Indian data centres and the safe harbour provisions for IT services. According to him, these steps position India not only as a large digital market, but also as “a global hosting hub.”
He also stressed that as AI workloads grow, the need for secure, high-availability connectivity will become just as important as compute and storage.
Cybersecurity leaders have echoed similar views. Major Vineet Kumar, Founder and Global President of CyberPeace, called the Budget a strong signal that India’s growth and security priorities are now deeply connected.
“India’s growth ambitions are now inseparable from its digital and security foundations,” he said.
He added that the focus on AI, cloud, and deep-tech infrastructure makes cybersecurity a core national and economic requirement, not a secondary concern.
From the banking and services perspective, Manish S., Head of Trade Finance Implementation at Standard Chartered India, highlighted the opportunities the Budget creates for professionals and businesses.
“India’s Budget 2026–27 supports services with fiscal incentives for foreign cloud firms, a data centre push, GCC support and skilling commitments,”
he said, encouraging professionals to upskill in cloud, AI, data engineering, and cybersecurity to stay relevant in the evolving ecosystem.
Infrastructure providers also see long-term impact. Subhasis Majumdar, Managing Director of Vertiv India, described the tax holiday as a major competitiveness boost.
“The long-term tax holiday for foreign cloud companies until 2047 is a game-changing move,”
he said, adding that it will attract large global investments and create a multiplier effect across power, cooling, and critical digital infrastructure.
Sujata Seshadrinathan, Co-Founder and Director at Basiz Fund Service, also welcomed the Budget’s balanced approach to advanced technology adoption.
She noted that the government has recognised both the benefits and challenges of emerging technologies like AI, including ecological concerns and labour displacement. She highlighted that the focus on skilling, reskilling, and DeepTech-led inclusive growth is “a push in the right direction.”
Together, these reactions reflect a shared view across industry: Budget 2026 is not just supporting technology growth, but actively shaping the foundation for India’s long-term digital and cyber future.
Budget 2026 Sets the Stage for India’s Digital Decades
Overall, Budget 2026 feels less like an annual budget and more like a policy blueprint for India’s digital future.
The focus on AI infrastructure, cloud investments, IT simplification, semiconductor capability, and cybersecurity readiness suggests India is preparing not just for the next fiscal year — but for the next generation.
The foundation is being laid. The opportunity is clear.
The next step will be execution — because if these measures translate into real infrastructure, skilled talent, and secure digital systems, India Budget 2026 could be remembered as the moment India firmly positioned itself as a global digital powerhouse.
