Budget 2026 Must Secure India’s New-Age Growth and Shift Economic Power Home

Mumbai, Dec 05 : As the government prepares the Union Budget 2026–27, rapid technological disruption and an increasingly uncertain global economic environment are shaping policy priorities. These trends are expected to find a strong echo in the upcoming Budget.

According to an ET report citing sources, leading economists and industry experts, during a pre-Budget consultation chaired by Prime Minister Narendra Modi, called for targeted policy support for data centres, artificial intelligence (AI) and robotics. They underlined the need to accelerate diversification of India’s services exports, arguing that higher-value digital, financial and knowledge-based services could help cushion the economy against global trade volatility.

If accepted, these recommendations would signal India’s intent to position itself at the forefront of next-generation technologies. AI, robotics and advanced digital infrastructure are no longer peripheral innovations; they are becoming foundational to productivity, competitiveness and long-term growth. A Budget that meaningfully supports these sectors would show India’s ambition to shape the next phase of the global digital economy rather than merely adapt to it.

Cushioning India against global trade volatility

India’s merchandise exports remain exposed to external shocks such as protectionism, slowing demand in advanced economies and geopolitical tensions. While services exports have historically acted as a buffer, future resilience will depend on moving up the value chain. High-value digital services, AI-driven solutions and knowledge-intensive platforms offer stronger pricing power and lower vulnerability to cyclical downturns.

Targeted support for data centres, AI and robotics can help diversify services exports beyond traditional IT outsourcing. As global firms seek secure, scalable and cost-effective digital infrastructure, India has the opportunity to emerge as a hub for cloud services, AI model training and automation-led solutions. This diversification would reduce reliance on a narrow set of export markets and protect the economy from sudden global trade disruptions.

Data centres as the backbone of the digital economy

Data centres form the physical backbone of the digital economy, enabling cloud computing, AI processing, fintech platforms, e-governance and emerging digital services. India’s data consumption is expanding rapidly, driven by digital payments, streaming, e-commerce and growing AI adoption. However, domestic data centre capacity still lags potential demand.

Fiscal incentives, rationalised power tariffs, easier land access and faster approvals could accelerate investment in this capital-intensive sector. A robust domestic data centre ecosystem would also strengthen data sovereignty, cybersecurity and compliance with evolving data protection norms, while lowering costs for startups and enterprises.

Artificial intelligence as a productivity multiplier

AI is moving from experimentation to large-scale deployment across healthcare, agriculture, manufacturing, finance and logistics. For India, AI is not only about global leadership but also about addressing scale-specific challenges, from improving crop yields to enhancing public service delivery.

Budgetary support for AI research, domestic compute capacity and industry-academia collaboration can help bridge the gap between innovation and application. Without strategic investment, India risks becoming a consumer of AI technologies developed elsewhere rather than a producer of globally relevant solutions.

Robotics and automation for industrial transformation

Robotics and automation are central to the next phase of manufacturing efficiency and industrial competitiveness. As global production systems increasingly rely on smart factories, India must adopt automation to remain integrated into global value chains.

Policy support for robotics startups, manufacturing applications and applied research can accelerate adoption while fostering indigenous capabilities. When combined with skilling initiatives, robotics can complement the workforce by enabling transitions into higher-value roles.

Putting India ahead in the global tech race

The global race for leadership in AI, advanced computing and automation is intensifying, with major economies deploying large-scale fiscal and industrial policies. For India, inaction risks technological dependence and missed opportunities. A Budget that prioritises these sectors would send a strong signal to global investors and technology partners about India’s long-term vision.

Backing data centres, AI and robotics in Budget 2026–27 would help anchor India’s growth strategy in high-value, technology-driven sectors, strengthen economic resilience and position the country as a key player in the global new-age technology order.