Union Budget 2025 | Rs 20K cr for research, AI, geospatial initiatives to drive R&D, but India needs more, say Industry players

New Delhi: The Rs 20,000-crore allocation to drive research, the expansion of AI and geospatial initiatives and further push to Atal Tinkering Labs are some of the significant steps taken in the Union Budget 2025-26 to strengthen the country's research & development (R&D) ecosystem, but the country needs more, industry players said.

Union Finance Minister Nirmala Sitharaman has allocated Rs 20,000 crore to the Department of Science and Technology to promote private sector-driven innovation. Sitharaman further said 50,000 Atal Tinkering Labs will be set up in the next five years to cultivate scientific temper in young minds.

The 2025 Union Budget marks a significant step forward in strengthening India’s R&D ecosystem, Shirshendu Mukherjee, Managing Director, Wadhwani Innovation Network, said.

"The Rs 20,000 crore allocation for private & public sector-driven research, the expansion of AI and geospatial initiatives, and the push for Atal Tinkering Labs demonstrate the government's strong commitment to fostering innovation-led growth. By nurturing creativity from a young age and advancing deep tech research, these investments will accelerate AI, digital transformation, and position India as a global leader in emerging technologies," he told PTI.

He said that to further catalyse this momentum, continued focus on industry-academia collaboration, commercialisation of research, and scalable funding models will be key.

"With sustained policy backing, India is well on its way to becoming a powerhouse of cutting-edge innovation, fueling Viksit Bharat 2047," he said.

"The establishment of five National Centres of Excellence for Skilling and a Rs 500 crore investment in AI-driven education will significantly enhance workforce readiness for the future," Wadhwani Foundation President & CEO Ajay Kela said.

The industry believes the Rs 20,000 crore investment in small modular reactor R&D and incentives for capacity augmentation will create opportunities for energy-intensive industries.

This allocation, Dushyant Chachra, said CFO of SAEL -- a renewable and green energy company -- signals a significant initial push, but a more comprehensive and sustained strategy is essential going forward to progress faster in this segment.

"I believe the government may consider introducing the measures like additional allocation in R&D funds, minimise regulatory clearances, and provide significant tax breaks to encourage private partnerships in the near future," he said.

Vishwanathan Iyer, Professor and Director of Accreditation, Great Lakes Institute of Management, Chennai, said there is room for deeper tax incentives for private sector research.

"Encouraging corporate R&D spending through weighted deductions and public-private partnerships can accelerate innovation. Additionally, a dedicated fund for high-risk, high-reward research, especially in deep tech and defence can ensure India leads in disruptive innovations," he said.

According to Bharat Kale, Emeritus Scientist and Director of Material Science, Centre of Excellence at MIT World Peace University, the country needs to increase R&D spends.

"India certainly increased the R&D budget this year but it is much lower than other countries like China, Japan, and Korea... Indian industry spends negligible amount on R&D and its participation (in R&D) is much less and should be increased," Kale said.

"The Department of Science and Technology (DST) has seen a massive increase in Budget, with an allocation rising to Rs 23,290 crore in 2025-26 from Rs 2,819 crore in the previous year. This significant increase will support a wide range of scientific projects, including quantum computing, supercomputing, and geospatial infrastructure," Sourabh Kulshrestha Dean for Research & Development at Shoolini University, said.

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Union Budget 2025 | Nirmala Sitharaman, as Finance Minister, presented her record 8th Union Budget this time. While inflation has burnt a hole in the pockets of 'aam janata', the Modi govt gave income tax relief for those making up to Rs 12 lakh per year in salaried income. Track the latest coverage, live news, in-depth opinions, and analysis only on Deccan Herald. Also follow us on WhatsApp, LinkedIn, X, Facebook, YouTube, and Instagram.