India’s technology ecosystem today spans IT services, product engineering, global capability centres, startups, and emerging deep-tech domains. It has shown resilience through global uncertainty and continues to attract international demand. At the same time, the environment is changing rapidly. Advances in AI and deep tech are reshaping business models. Geopolitical shifts are influencing investment flows and supply chains. Talent requirements are evolving faster than ever. Policy must respond with focus, clarity, and speed.
Implementation must take centre stage
One of the strongest signals from industry engagement over recent years is the importance of implementation. India has articulated several forward-looking digital and technology policies, but their success depends on adoption. The Union Budget can play a critical role by strengthening coordination mechanisms and ensuring accountability.
Clear ownership, defined timelines, and outcome-linked funding should accompany major technology initiatives. Regulatory consistency across jurisdictions will reduce friction for businesses operating at scale. Equally important is sustained public–private dialogue. Continuous engagement between government and industry helps refine policies in real time and ensures they remain aligned with evolving market realities.
India’s startup ecosystem has matured, with founders increasingly building for global markets. The next wave of value creation lies in deep-tech areas such as AI, semiconductors, quantum computing, advanced manufacturing, and climate technology. These sectors require long-term investment, strong research linkages, and patient capital.
The Budget should reinforce funding mechanisms that support deep-tech innovation, from research to commercialisation. Dedicated funds with longer investment horizons, incentives for corporate participation in research and development, and stronger pathways for technology transfer from academic institutions can accelerate scale. Simplifying ESOP (employee stock option) taxation and improving capital gains treatment will help startups attract and retain high-quality talent.
Support must also extend beyond early-stage funding. Access to global markets, predictable regulations, and scale-up capital will determine whether Indian deep-tech companies can compete at the highest level.
Strengthening India’s attractiveness for global investment
Global enterprises continue to view India as a strategic destination for technology development. Global capability centres and R&D hubs in India are increasingly working on core platforms and products, not just support functions. This shift reflects confidence in India’s talent base and engineering depth.
Tax certainty and regulatory clarity remain key enablers of this trend. Refining transfer pricing frameworks, updating safe harbour rules, and reducing compliance complexity can strengthen investor confidence. Predictable policies allow companies
to make long-term commitments, expand operations, and invest in advanced capabilities.
The Budget should also recognise the growing importance of services exports in a digital economy. Streamlined GST processes, smoother cross-border frameworks, and simplified export incentives can reinforce India’s position as a trusted global technology partner.
Building digital infrastructure and strategic capacity
Technology growth rests on robust digital infrastructure. Continued investment in broadband expansion, cloud readiness, and secure digital public platforms will support innovation across sectors, from healthcare and education to manufacturing and finance.
National initiatives around AI governance, cybersecurity, and digital trust require sustained funding and institutional capacity. As AI adoption accelerates, frameworks that balance innovation with responsibility become essential. Institutions focused on AI safety, data governance, and cyber resilience must have clear mandates and the ability to translate policy intent into operational outcomes.
Alignment between central and state governments will be especially important for large-scale infrastructure and digital programmes.Performance-linked funding can help ensure these initiatives deliver measurable impact on the ground.
Broadening technology participation
Technology leadership ultimately depends on people. India’s demographic advantage offers a unique opportunity, but only if skills development keeps pace with technological change. Demand continues to rise for expertise in AI, cloud engineering, cybersecurity, semiconductor design, and systems architecture.
Public-private partnerships can help design curricula that reflect real-world needs and evolve with technology. Digital learning platforms, modular certifications, and continuous upskilling pathways will enable professionals to transition across roles and domains.
Broadening participation is equally critical. Expanding access to digital skills for women, tier-2 and tier-3 cities, and underrepresented groups will deepen the talent pool and support inclusive growth. A future-ready workforce strengthens India’s position as a global innovation hub.
Embedding trust and responsible innovation
As technology becomes deeply embedded in everyday life, trust becomes a strategic asset. Data protection, cybersecurity, and ethical AI frameworks must evolve alongside innovation. Businesses and consumers alike need confidence that digital systems are secure, transparent, and accountable.
The Budget can support this by aligning regulatory frameworks with global standards while remaining grounded in India’s context. Investment in cyber resilience, support for compliance readiness among smaller firms, and clarity on data governance will strengthen trust across the ecosystem. Responsible innovation also enhances India’s voice in global technology governance discussions.
The Union Budget 2026-27 arrives at a moment when India’s technology sector can shape the country’s broader economic trajectory. The priorities are clear: Stronger implementation, deeper support for innovation, competitive tax and regulatory frameworks, resilient digital infrastructure, and a future-ready workforce.
India has the talent, the market, and the ambition. With focused execution and policy coherence, this Budget can help move the technology sector from momentum to sustained leadership and position India as a trusted technology powerhouse in the decade ahead.
The writer is chairperson, Nasscom; president, Indo-German Chamber of Commerce; and MD, SAP Labs India
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