Representative image of a data centre.
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Union Budget 2026–27 marks a structural turning point for India’s technology economy. Rather than approaching technology through isolated sectoral incentives, the Budget articulates a connected national strategy that treats technology as core economic infrastructure.
India is preparing to move beyond from being a large exporter of technology services to becoming a full-stack digital economy built on creating robust AI and digital infrastructure, domestic intellectual property, resilient supply chains, advanced manufacturing, and globally scalable digital infrastructure.
This shift is most clearly reflected in the launch of India Semiconductor Mission 2.0. The mission moves beyond the earlier focus on attracting fabrication facilities to building full ecosystem ownership across design, equipment, materials, and intellectual property.
The semiconductor push is reinforced by a Rs 40,000 crore expansion in electronics manufacturing support, but its importance lies less in scale and more in strategic intent.
Rather than prioritising assembly-led growth, the Budget directs investment toward high-value, technology-intensive manufacturing where competitiveness is driven by engineering depth and process innovation.
This is strengthened by the creation of dedicated rare-earth mineral corridors and domestic processing facilities.
As physical technology infrastructure is strengthened, the Budget simultaneously accelerates the development of digital and cognitive infrastructure.
Artificial intelligence, quantum computing, and scientific research are positioned as horizontal capabilities that cut across sectors rather than stand-alone initiatives.
The Budget introduces a meaningful structural reset for the IT and Global Capability Centre ecosystem by bringing software development, IT services, knowledge process outsourcing, and contract R&D under a single category of Information Technology Services.
The importance of digital infrastructure is addressed with equal clarity.
Clearly, the game-changing moment was to provide tax holiday status till 2047 for companies who want to build Data Centres in India.
As AI adoption accelerates, the demand for data centres supported by reliable power, land, water, and connectivity will grow exponentially. By offering long-term certainty to global cloud providers and data centre operators, India is positioning itself not only as a hub for domestic data, but as a destination for global digital workloads.
Taken together, these measures reveal a deliberate technology architecture rather than a series of standalone announcements.
(The author is an IT industry leader)
Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH.