Expectations to fortify India’s digital frontier in 2026

As India accelerates toward its USD 5 trillion digital economy goal, the upcoming Union Budget 2026-27 arrives at a critical juncture. Now, technology is no longer just a business enabler, it is the country's core national infrastructure. From real-time digital payments to AI-driven governance, the "Resilient Backbone" of the nation is being forged in the heat of rapid AI adoption, cloud expansion, and an escalating cybersecurity landscape.

Building the AI-ready foundation

The industry consensus is clear; to maintain its global edge, India must evolve from a consumer of AI to a sovereign architect. This transition requires world-class physical infrastructure that can handle the sheer density of modern workloads.

Sachin Panicker, Chief AI officer at Fulcrum Digital, views this as a defining decade for Indian innovation.

“India stands at a pivotal moment in its AI journey... We expect the Budget to prioritise strategic investments in foundational infrastructure, particularly in world-class data centres, cloud ecosystems, and sustainable high-performance computing, that can unlock enterprise-grade AI adoption across sectors.”

This sentiment is echoed by Sunil Gupta, CEO of Yotta Data Services, who notes that the IndiaAI Mission has already set a strong base.

“Priority should be given to targeted fiscal support for sovereign AI and data centre infrastructure, rationalisation of import duties on GPUs and other critical hardware, and easing GST on AI and cloud services to reduce deployment costs.”

Data centres: The new strategic infrastructure

Data centres are the "factories" of the 21st century. Industry leaders are now calling for these facilities to be granted "Strategic National Infrastructure" status, putting them on par with roads, ports, and power plants.

Manoj Paul, MD of Equinix India, highlights that this status is essential for managing the energy-intensive demands of AI.

“Sustained growth of digital infrastructure depends on policy frameworks that address three core priorities: access to reliable, affordable power, faster new fibre deployment, and infrastructure expansion aligned with sustainability goals. We hope this budget provides additional support and further special recognition of data centers as strategic national infrastructure.”

Ramanujam Komanduri, Country Manager at Pure Storage India, adds that modernisation is just as vital as expansion.

“Incentives that support modernisation of legacy systems, energy-efficient data centres, and advanced data management technologies can help organisations manage explosive data growth while improving energy efficiency and resilience.”

The resilience mandate: Security in the age of agentic AI

As enterprises move AI from pilots to full-scale production, the "operational resilience" of these systems becomes a matter of national security. The rise of Agentic AI, autonomous systems that can act on behalf of users, brings both massive efficiency and new vulnerabilities.

Arun Balasubramanian, Managing Director at Dynatrace India, emphasises that modernisation must be paired with visibility.

“Digital systems now power everything from welfare platforms to digital payments. We would welcome Budget measures that support the modernization of legacy digital systems through policy incentives that strengthen operational resilience... Better visibility, automation, and monitoring become essential to address key barriers such as security risks.”

Cybersecurity as national defence

Perhaps the most urgent plea from the industry is to treat cybersecurity as a core pillar of national defence. With AI-enabled attacks becoming the new normal, the budget must move beyond perimeter defence toward a comprehensive "Cyber Resilience" framework.

Sharda Tickoo, Country Manager at Trend Micro, argues for sustained, intelligence-led investments.

“Union Budget 2026 presents a defining opportunity to strengthen India’s cyber resilience by recognising cybersecurity as core national infrastructure. Cyber threats today go far beyond data breaches, with the potential to disrupt essential services, financial systems, and supply chains. Targeted investments in quantum-safe cryptography and AI-driven cyber defence platforms will define India’s leadership.”

As the Finance Minister prepares to present the budget on 1 February 2026, the industry's eyes are on the "structural plumbing" of the digital economy. If the budget can bridge the gap between AI ambition and infrastructure reality, India is well-positioned to become the world’s most resilient digital hub