Union Budget 2026: Finance Minister Nirmala Sitharaman put forth the Union Budget today which marks her ninth consecutive budget on Sunday, and this included some major announcements for the tech industry, which includes semiconductor, artificial intelligence (AI),electronics and more.
Lets take a look all the key highlights for the tech industry in Union Budget 2026.
ISM 2.0 Announced
The government will also initiate the second phase of Indian Semiconductor Mission (ISM). Under ISM 2.0, the government will take an end-to-end role by enabling domestic production of equipment and materials, developing full-stack Indian intellectual property, and strengthening resilient supply chains. The Finance Minister said, “We will also focus on industry-led research and training centres to develop technology and skilled workforce”.
Data Centers To Get Tax Holiday
The government has also announced a tax holiday until 2047, and this move is to boost the data center sector. As long al these services are offered through Indian sellers , companies offering cloud services can take advantage of this.
Threshold For IT Services Increased
In the IT sector, the budget increases the threshold for IT services to ₹2,000 crore from ₹300 crore and provides for the consolidation of digital services into a single information technology services category with a standard safe harbour margin of 15.5 percent.
Electronics Component Manufacturing Boost
The Finance Minister also announced that the union government will also give Rs 40,000 crore in this budget to electronic component manufacturing scheme (ECMS), initially the plan was allocated Rs 22,919 last year.
AI led development in various sectors
Apart from the above mentioned, there are a couple of benefits that the government has announced for everyone, from farmers utilising smart tools to women who want to get into STEM, or even youth learning new skills or differently abled trying to gain access for better opportunities. To speed things up, the Budget has lined up support for emerging technologies through initiatives like the AI Mission, the National Quantum Mission, the Anusandhan National Research Fund, and the Research, Development and Innovation Fund. It has also proposed the launch of Bharat-VISTAAR, a multilingual AI platform that can plug into AgriStack portals and ICAR’s agricultural knowledge systems. The idea is to help farmers make better decisions, boost productivity, and cut risks by offering personalised, AI-driven advice.
Another thing that would be established would be a national digital knowledge grid, which would digitally document culturally and Spiritually significant places that also encompass heritage. This will boost job creation and research.