Union Budget 2026-27: Architecting India’s Deep-Tech Decalogue

In the hallowed halls of Parliament today, Finance Minister Nirmala Sitharaman delivered a Union Budget that signaled a decisive pivot. For the ICT and business sectors, the message was clear: India is no longer content being the world’s "back office." With a massive Rs 12.2 lakh crore capital expenditure target and the launch of India Semiconductor Mission (ISM) 2.0, the 2026-27 Budget is a blueprint for transforming India into a global "Intelligence Hub."

1. The AI sovereignty: Beyond the hype

The budget treats Artificial Intelligence not as a prestige project, but as a critical economic engine. The IndiaAI Mission has evolved from foundational setup to aggressive scaling. To democratize AI, the government announced a subsidy-linked marketplace for GPU access, aiming to provide 10,000+ GPUs to startups and researchers.

A dedicated Rs 500 crore AI Center of Excellence for the education sector was established to bridge the gap between classroom learning and industry-relevant AI skills.

2. Semiconductors 2.0: Completing the value Chain

While ISM 1.0 brought fabs to Indian soil, ISM 2.0 focuses on the "guts" of the industry. The outlay for the Electronics Component Manufacturing Scheme has been nearly doubled to Rs40,000 crore.

A new focus on creating "Indian-owned IP" in chip design and specialized materials aims to reduce reliance on global giants for high-precision tools.

3. Data centres: The new "Strategic Infrastructure"

In a long-awaited move, Data Centres have been granted Strategic Infrastructure Status.This allows operators to access long-term, low-interest credit and simplifies the land acquisition process.

The budget ties future incentives to sustainability metrics, specifically focusing on Power Usage Effectiveness (PUE) and the use of treated wastewater for cooling—a move set to focus on green data hubs.

4. Boosting the "Office of the World": GCCs & MSMEs

A Rs 10,000 crore equity fund was announced to help tech-driven MSMEs scale into global "Champion" enterprises.

To support the expansion of Global Capability Centres (GCCs), the government proposed "Digital Economy Zones" in smaller cities with enhanced incentives for hiring women and digital skilling.

The takeaway

This budget moves away from broad-based digital schemes toward targeted, "deep-tech" interventions. By eliminating the Basic Customs Duty on 25 critical minerals (like Lithium and Cobalt) and rationalising taxes for non-resident tech service providers, the government is making a clear play for the entire high-tech supply chain.

For the Indian CIO and IT leader, the 2026-27 Budget provides the "compute" and the "capital", the challenge now shifts to "execution" and "skilling."