Union Budget 2025: IT and Electronics industry calls for focus on Make in India, AI R&D, and digital infrastructure

Union Finance Minister Nirmala Sitharaman will present the budget on February 1 in the parliament.

Kapal Suresh Pansari, Managing Director of RP Tech, expressed his optimism and said that the budget will pave the way for sustainable growth and new opportunities in the sector.

"Incentives for Make in India initiatives and investments in infrastructure could significantly enhance the ICT (Information and Communications Technology) supply chain. Additionally, policies fostering innovation and skill development will be key to strengthening India's position as a global technology leader," he said.

The semiconductor sector is poised for significant growth, and according to Hareesh Chandrasekar, CEO and Co-Founder of AGNIT Semiconductors, calls for a 'green channel' for ultra-fast customs clearance of semiconductor materials, streamlining the manufacturing process.

He said, "Measures like lower GST on indigenously manufactured components, reduced import duties on semiconductor-grade inputs, and zero to low-interest funding for domestic companies can catalyse growth for home-grown semiconductor manufacturers."

Additionally, he advocates for government-promoted Venture Capital funds and incentives to bring back NRI engineers working at global semiconductor giants to address talent gaps.

Similarly, the IT sector's future is heavily dependent on AI, and Narinder Kumar, CEO of TO THE NEW, said, "We hope to see significant funding allocations for generative AI research and development, as well as the establishment of a regulatory sandbox to facilitate experimentation and advancement in AI."

Kumar also anticipates increased export incentives for IT exports, particularly in GenAI, to boost India's global competitiveness.

On the infrastructure front, Nirmalya Chatterjee, Country VP and MD at Nemetschek Group, points to the critical role of technology integration in driving construction and infrastructure growth.

"The Union Budget FY26 is expected to prioritise infrastructure and construction as key drivers of economic growth, with a focus on increased investments and technological integration," he explains.

A key area of focus for industry leaders is the urgent need for job creation and skill development.

Gagan Arora, founder and CEO of Vertex Global Services, points to the importance of skilling programs, particularly in emerging technologies.

"The government should prioritise job creation and skill development. Enhancing access to vocational training and higher education through targeted investments in skill development is one of the major things to watch out for in the budget," Arora notes.

"Investments in skilling and upskilling programs, addressing talent gaps through public-private partnerships, and fostering a future-ready workforce are essential. Tax relief and incentives for startups and MSMEs will help them scale, attract capital, and create jobs," said Raja Lahri, Partner and Technology Industry Leader at Grant Thornton Bharat.

Going further, Mayank Maggon, Founder, CEO and CTO, Techchefz Digital, said, "The upcoming Union Budget will introduce measures to support the growth of IT service SMEs. Implementing single-window clearances to streamline regulatory processes would simplify compliance, enabling SMEs to focus on innovation and service delivery."

As India continues to position itself as a global leader in AI, several leaders are looking to the Union Budget for concrete steps to foster AI innovation.

A S Rajgopal, CEO and Managing Director of NxtGen, further stresses the importance of AI in driving growth across sectors, with a specific budget provision for AI implementation in government ministries.

"I expect the government to create a specific budget provision for the use of AI in all the ministries so that GoI continues on the path of setting an example for the industry to follow," he added. (ANI)