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Union Budget 2025: Setting A Vision for Growth, Innovation and Global Aspirations

The Union Budget 2025-26 covers a gamut from funding for startups to nuclear energy push. Read to hear what the industry feels about it.

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Shrikanth
New Update
Budget 2025

 

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Key Highlights:

  • Boost for Startup and Fintech : Announcement of a new ‘Fund of Funds’ and a revamped central KYC system to foster transparency and trust.
  • Economic and Credit Expansion: Aimed at targeted liquidity for MSMEs, farmers, and a shift to cashflow-based lending to drive stability.
  • Emphasis on Make in India & Manufacturing: The National Manufacturing Mission will strengthen domestic production and employment.
  • Focus on AI & Deep Tech Investment: The allocation of ₹20,000 crore for R&D, Deep Tech Fund, and AI-driven education initiatives augurs well for emerging tech sector and will jumpstart India’s lead.
  • Global Capability Centres (GCCs): the National Framework for GCCs to position India as a global digital hub.

Reactions from IT Industry:

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 Dr Ajai Chowdhry, Founder, HCL, Chairman, EPIC Foundation

The budget offers mixed outcomes for the industry. The addition of ₹10,000 crore funds of funds and ₹20,000 crore for deep tech is beneficial for startups seeking VC funding. However, there is no focus on making India a leader in electronic products and chips, crucial for strategic autonomy amid current geopolitics.

For startups, there has been no correction in ESOP taxation—a significant oversight. On a positive note, allowing loans between ₹10-20 crore under credit guarantee schemes will greatly aid startups with their working capital needs. Initiating research and development in the private sector, last year’s plan of ₹1 lakh crore has been advanced with a provision of ₹20,000 crore in this year’s budget. This initiative is highly beneficial for establishing India as a leading nation in product innovation.

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The opening of the nuclear sector to private companies and the move towards smaller Modular Micro Reactors (MMRs) marks an important step in moving away from fossil fuels and diversifying energy sources. In the future, with the expected increase in Data Centers, nuclear energy will become essential, especially as smaller reactors are being developed worldwide.

The National Geospatial Mission is another noteworthy initiative aimed at improving efficiency and promoting development. The establishment of a Manufacturing Mission and enhancing Ease of Doing Business (EODB) will also play a pivotal role in attracting more investments.

Atul Soneja, Chief Operating Officer, Tech Mahindra

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The Budget's forward-looking focus on deep-tech innovations like AI, global capability centres (GCCs), and future-ready talent underscores a strong commitment towardsViksit Bharat.The other initiatives like Deeptech Fund of Funds and 10,000 fellowships for tech research, 5 National CoEs and a CoE for AI in Education, reiterate our commitment to developing an ecosystem for next-gen tech. The opening up of new avenues for GCCs in tier-2 cities will help states bolster their infra, bridge skill gaps and aid talent growth.

C.P. Gurnani, Co-founder and Chief Executive Officer, AIonOS

With India’s economy being the fastest growing among major global economies, the Union Budget rightly allocates additional resources to drive innovation and technological advancement. The emphasis on skilling, new reforms to enhance the ease of doing business, and the establishment of a Centre of Excellence for Artificial Intelligence can serve as key drivers of India’s growth. The announcement of a Deep Tech fund can encourage startups from both technical and non-technical backgrounds to make a substantial contribution to the economy. Additionally, a new manufacturing mission under the Make in India initiative will strengthen MSMEs, which play a vital role in positioning India as a global manufacturing hub and generating employment for our youth. 

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Sunil Gupta, Co-founder, CEO & MD, Yotta Data Services

The Union Budget 2024 reinforces India’s ambition to emerge as a global technology powerhouse by driving AI, deep tech, and cutting-edge research. The ₹500 crore investment outlay for a Centre of Excellence for AI in education is a big step towards making AI-led learning mainstream. This will not only help in upskilling the AI talent pool in India and preparing the youth for the jobs of the future but also democratize access to high-quality education by enabling AI-driven solutions such as real-time language translation and personalized learning pathways. This is especially critical in a country where millions of students receive their education in their native languages and aspire to careers in sectors that primarily operate in these languages.

Additionally, measures like the Deeptech Fund of Funds and the 10,000 fellowships for tech research at IITs and IIScs under the PM Research Fellowship Scheme will help bridge the gap between education and employability while creating a robust pipeline for homegrown AI-led technological breakthroughs. By integrating AI into education at scale, India is not only addressing existing challenges in the education system but also equipping students with the digital and analytical skills necessary for the modern economy.

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 Just as the IT boom positioned India as a global tech hub, this budget lays the foundation for long-term AI leadership by prioritizing talent development. By fostering AI-driven learning, removing financial and linguistic barriers, and enabling large-scale skill-building, India is not just preparing for the future but actively shaping it—taking a decisive step toward global digital leadership.

Sridhar Pinnapureddy, Founder and CEO, CtrlS Datacenters 

Budget 2025 charts a transformative course for India's digital economy and CtrlS Datacenters is particularly enthusiastic about its impact on the datacenter industry. The government's commitment to expanding digital infrastructure, including crucial investments in network connectivity, will bring world-class datacenter services to Tier 2 and 3 cities, fuelling economic growth nationwide. The 1.5 lakh crore in interest-free infrastructure loans is a significant catalyst for further investment in the sector. 

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We applaud the substantial Rs.10,372 crore allocated to the India AI mission and the establishment of AI Centres of Excellence, which will accelerate India's leadership in AI and create a robust talent pipeline. These initiatives will significantly increase demand for datacenter capacity and foster a thriving AI ecosystem.

CtrlS Datacenters also welcomes the focus on renewable energy and clean technologies. The government’s Nuclear Energy Mission and its Rs. 20,000 crore R&D push for Small Modular Reactors (SMRs) will accelerate the transition to clean energy solutions, helping the datacenter industry achieve long-term carbon neutrality. This commitment to sustainability is essential for the future of datacenters, enabling the development of a low-carbon, future-ready infrastructure. We are excited by the opportunities this forward-thinking budget creates and are committed to continuing our mission of building the most resilient and green datacenters in India, supporting the nation's digital transformation journey.

Akash Sinha, CEO and Co-founder, Cashfree Payments

 The Union Budget marks a decisive step toward positioning India as a global leader in innovation, with a clear focus on startups, technology, and progressive regulations. The launch of a new ‘Fund of Funds’ will energize the startup ecosystem, enabling the creation of the next wave of tech and deep-tech ventures. Also, the introduction of a revamped central KYC system will drive greater transparency and trust within the financial ecosystem. Establishing a Digital Public Infrastructure for international trade will simplify cross-border financing, enhancing India’s role as a key player in global commerce. These initiatives will boost India’s fintech growth and strengthen its role in the digital economy.

Jaya Vaidhyanathan, CEO, BCT Digital

The budget takes a bold, strategic approach to economic growth, balancing fiscal incentives, credit expansion, and sustainability to drive long-term resilience and global competitiveness. It boosts disposable income through reduced personal income tax and higher TDS limits for senior citizens and rent, stimulating consumption and economic momentum. Targeted credit expansion for farmers and MSMEs will inject vital liquidity, accelerating sectoral growth, while the transition to cashflow-based lending reinforces financial stability. The Bharat Trade Net and NABFID credit enhancements will sharpen India’s export competitiveness amid global headwinds. Moreover, a strong push for workforce participation, particularly for women, and a firm commitment to green initiatives will drive sustainable, inclusive development. I expect these measures to collectively lay the foundation for long-term economic resilience and nationwide growth.

Rajesh Doshi, Co-founder & Director, Zebronics

 The Union Budget 2025's introduction of the National Manufacturing Mission will bolster the 'Make in India' initiative significantly, along with the reforms for MSMEs and startups, which will greatly encourage employment opportunities, including for the women workforce, across all spectrums. Additionally, the revised New Income Tax regime, with no tax on income up to ₹12 lakh, underscores an increase in disposable income, stimulating consumer spending and economic growth.

Sourabh Jalan, Chief Financial Officer, Xoriant

The Union Budget sets a bold vision for Viksit Bharat, fostering an ecosystem where innovation thrives, capital flows seamlessly, and businesses—smart-sized like ours—scale with agility. The establishment of five National Centers of Excellence for skilling, coupled with a ₹20,000 crore innovation push—including a Deep Tech Fund and ₹500 crore for AI CoEs in Education—strengthens India's position as a leader in AI and emerging technologies. The focus on Global Capability Centres (GCCs) in Tier-II cities is a pivotal move in India's journey to becoming a strategic hub for digital engineering. At Xoriant, we are excited to contribute to this vision—leveraging skilled talent and innovative tech to accelerate platform-led growth and drive transformative advancements.

Suresh Ramamoorthy, Country Head, Lingaro India

The Union Budget 2025-26 is comprehensive focused on holistic growth—not only making the nation self-reliant but also preparing it to take on global leadership across sectors, including technology, manufacturing, and skilled labor. It reinforces India’s ambition to continue its leadership position in research and outsourcing in AI, data, and innovation-driven industries.

The announcement of setting up a National Framework for GCCs is a particularly welcoming initiative as it will provide a structured roadmap for one of India's fastest-growing sectors. With over 1,700 GCCs employing nearly 1.9 million professionals, this framework will help strengthen India’s position as a hub for advanced technology solutions while driving deeper collaboration between industry and academia.

The setting up of a dedicated Centre of Excellence in AI for Education, in addition to other AI-driven initiatives, represents the government’s commitment to fostering homegrown innovation and leveraging AI for national progress. These investments align with the national vision to accelerate India’s transformation into an AI powerhouse while equipping the workforce with future-ready skills.

Additionally, the plan for developing five National Centres of Excellence for skilling, with global expertise and partnerships, will further enhance the employability of India’s youth. As we enter the era of Industry 4.0, the focus on deep tech, advanced manufacturing, and digital skilling is imperative. The allocation of ₹20,000 crore for private sector-driven R&D, along with the proposed Deep Tech Fund of Funds, will be a game-changer in fostering the next generation of Indian startups and breakthrough innovations.

With a clear vision to integrate digital infrastructure, innovation, and human capital development, this budget not only propels India's ‘Make in India’ and ‘Make for the World’ vision but also ensures that India remains at the forefront of AI and data-driven transformation in the years to come."

Sumit Mitra, CEO, Tesco Business Solutions 
The tax relief is a positive and welcome step, providing individuals and households with greater disposable income. This is likely to drive increased consumer spending, particularly in the retail sector. However, it will be important to see how this measure aligns with the government’s broader fiscal discipline.  
India’s growing leadership in the Global Capability Center (GCC) space remains strong, and while additional targeted incentives could have further accelerated this momentum, the guidance framework introduced to promote GCCs is certainly a step in the right direction.

Benjamin Lin, President, Delta Electronics India

The Union Budget 2025-26 is India's commitment to becoming a world leader in sustainable technology, manufacturing, and digital innovation. Expansion of renewable energy, AI-driven industries, and smart infrastructure development make India the key player in the global green economy. 

A strong emphasis on Lithium-ion batteries, critical minerals, and domestic manufacture of EV batteries in this budget will be crucial in reducing India's dependence on imports and the development of India's EV ecosystem. The introduction of a National Manufacturing Mission for EV batteries would be a quick catalyst for indigenous production and encouraging the resilience of the supply chain. 

Other encouraging steps include setting aside ₹10,000 crores fund for startup. This will speed up innovation in clean-tech manufacturing, especially with regard to the production of solar PV cells, EV batteries, motors and controllers, electrolysers, and grid-scale batteries.

Delta Electronics welcomes the proactive steps taken by the government to speed up the transition to clean energy, strengthen the infrastructure for EVs, and enhance industrial automation. We look forward to collaboration with industry leaders and policymakers in these opportunities to make a global difference and spur innovation.

Jaepy Kurian, Senior Vice President & India Delivery Head, Orion Innovation

Its a balanced budget with something positive for everyone. The establishment of five National Centres of Excellence for Skilling to equip the youth with the necessary skills for global opportunities is very much the need of the hour. Also the setting up of the AI Centre of Excellence for education at an outlay of INR 500-cr will surely drive innovation in the education / EdTech sector.
 The Government’s thrust on agriculture, MSME, investments and exports as the four power engines of development shows a well-thought out and focused stance.
 The proposal for a new Deep Tech Fund of Funds is quite a significant step towards growing deep tech innovation in India. It shows the Government’s serious intent to position India strongly in the global AI scenario. In a nutshell, it is a colossal steptowards strengthening India's startup ecosystem.
 
And last but not the least, the tax reforms proposed will benefit the middle class by increasing disposable income, which in turn will fuel demand for essential and also aspirational categories of products and services.

Ramesh Punugu, Global Head, Buy-side Research, Acuity Knowledge Partners

The 2025 Budget 2025 is transformative as despite a tax cut bonanza fiscal consolidation path remains on track. The government capital expenditure, however, remains flat at 3.1% of GDP. The budget is designed to drive consumption, improve the ease of doing business, and keep coalition partners satisfied. The income tax-cuts should be broadly positive for consumer durables, consumer discretionary and automotive sectors. A commendable job by finance minister as we continue to adhere glide path towards fiscal consolidation. Fiscal deficit is expected to be 4.8% GDP (better than 4.9% estimated in the July 2024) with a target of 4.4% of GDP for FY26, which is favorable from a credit rating perspective.
The deficit will be funded through net borrowing of INR 11.5 trillion ($171 billion), slightly higher than expectations, and should remain attractive to foreign investors (FIIs purchased $14.4 billion of index-eligible bonds in 2024). Additionally, key measures such as a focus on nuclear energy, 100% FDI in insurance, exemptions and rationalization of customs duties, skill improvement initiatives, and special packages for the toys and leather sectors will continue to support the corporate sector and MSMEs.

Sachin Tayal, Managing Director, Protiviti Member Firm for India

The budget gets a lot of proposals right on the mark against the overarching goal of boosting domestic consumption and consumer demand, manufacturing and exports, while keeping the fiscal deficit well in control. The high allocation for capital expenditure particularly in infrastructure is retained and will not only boost the GDP for the next fiscal but also will have a cascading and net positive effect on rest of the industry. 

We welcome the expansive digitalization initiatives across taxation, governance, education, healthcare, infrastructure, and international trade as they will make the government more accessible to citizens and businesses alike. The corporate sector has a lot to cheer from the proposed reforms in energy, urbandevelopment, and financial sectors, as well as new opportunities for their participation in India’s infrastructure development. The technology services sector is also set to expand with the introduction of a national framework supporting the rapid growth of Global Capability Centres (GCCs) in tier-II cities, emphasizing talent development and infrastructure enhancement.

Finally, the headline proposals including significant reductions in income taxes and the simplification of TDS, TCS, and related tax compliances will no doubt go a long way in uplifting the consumer sentiment and enhancing spending power, arguably the most important requirement for Indian economy at this juncture.”

 
India Budget 2025