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Tech leaders praise Union Budget 2026's Rs. 40,000 crore electronics scheme, AI missions for 250 million people, and Rs. 10,000 crore MSME fund as transformative steps towards self-reliance and innovation-led growth.

Finance Minister Nirmala Sitharaman presented a forward-looking budget in the Parliament yesterday. The budget taps onto AI, electronics, and semiconductor sectors, reducing custom duting and expanding monetary outlay for some its schemes. For instance, the Electronics Components Manufacturing Scheme outlay has been expanded to Rs. 40,000 crore. Furthermore, the government announced Capacity Building AI Missions aimed at upskilling 250 million people.

All of this and the Rs. 10,000 crore MSME Growth Fund has been welcomes by India's technology and manufacturing sector. Industry leaders largely view the policy measures as crucial steps towards strengthening domestic manufacturing capabilities and accelerating AI adoption across sectors.

Electronics Components Manufacturing Scheme expanded to Rs 40,000 crore

The government's decision to expand the Electronics Components Manufacturing Scheme (ECMS) has been hailed as an encouraging development for India's electronics ecosystem.

Sanjeev Agarwal, Executive Director and Chief Manufacturing Officer at Lava said, "The expansion of the Electronics Components Manufacturing Scheme to Rs 40,000 crore is an encouraging move to strengthen India's electronics manufacturing ecosystem. For ECMS to deliver its intended impact, it will be important to ensure that the necessary infrastructural enablers are set up, along with timely and effective implementation."

Nikita Kumawat, Co-Founder and Executive Director at Brandworks Technologies, described the budget as marking "a significant change in India's electronics and semiconductor journey, shifting the focus from capacity creation to long-term capability development."

She highlighted the introduction of Indian Semiconductor Mission 2.0 and the launch of the Shakti initiative as measures that "further strengthen the ecosystem and reflect the government's commitment to building a future-ready ecosystem across equipment, materials, full-stack IP, and resilient supply chains."

Capacity Building AI Missions target 250 million people

The budget's emphasis on artificial intelligence has been particularly well-received, with the government announcing Capacity Building AI Missions aimed at upskilling 250 million people.

Nakul Kundra, CEO and Co-Founder of Devnagri, said, "The Union Budget 2026 strengthens the government's initiative to make technology, especially AI, a core driver of India's next growth phase. Equally encouraging is the budget's emphasis on applied technology adoption, from AI-driven customised advisory tools and multilingual platforms like Bharat Vistar, to the use of AI for more efficient, transparent along with data-driven governance."

Raghav Gupta, Founder and CEO of Futurense, emphasised that the budget "reinforces India's intent to lead in the AI age by putting talent and capability building at the centre of national progress."

He added, "The introduction of the Capacity Building AI Missions for 25 crore people, along with support for the National Quantum Mission, Anusandhan Research Fund, and the R&D and Innovation Fund, signals a long-term commitment to creating both the talent and the infrastructure required for an AI-native economy."

Rs. 10,000 crore MSME Growth Fund to create champion MSMEs

The announcement of a Rs. 10,000 crore MSME Growth Fund has been welcomed as a crucial step in addressing the financing challenges faced by small and medium enterprises.

Imran Kagalwala, Co-Founder of Unix India, said, "The announcement of the Electronic Components Manufacturing Scheme signals a sustained effort to strengthen local manufacturing capabilities and reduce import dependence. In addition, the Rs 10,000 crore MSME Growth Fund aimed at developing Champion MSMEs helps address the long-standing need for patient equity capital, allowing companies to scale in a more balanced manner."

The budget also announced a Rs. 2,000 crore top-up to the Self-Reliant India Fund, which Kagalwala noted "further supports the availability of long-term risk capital, contributing to a more stable environment for innovation and growth."

Capital expenditure increased to Rs. 12.2 lakh crore

The government's continued focus on infrastructure development, with capital expenditure raised to Rs. 12.2 lakh crore, has been recognised as foundational to India's economic expansion.

Tadashi Chiba, MD and CEO of Panasonic India, said, "The government's consistent focus on infrastructure continues to be central to India's growth agenda. The Union Budget 2026-27, with capital expenditure increased to Rs 12.2 lakh crore, reaffirms infrastructure as the backbone of India's economic expansion."

He added that "the continued focus on strengthening India's manufacturing ecosystem through ECMS and the exemption of basic customs duty on select electrical appliances, including microwaves, is a timely measure that will improve cost efficiencies, encourage domestic value creation, and boost market adoption."

Banking sector to benefit from AI-led innovation

The financial services sector is expected to see significant transformation through the budget's emphasis on digital infrastructure and AI adoption.

Kishan Sundar, SVP and Chief Technology Officer at Maveric Systems, said, "Union Budget 2026 makes it clear that AI and IT services will play a central role in shaping the next phase of India's banking and financial services growth. As credit demand remains strong and banks operate under tighter funding and regulatory conditions, the emphasis on digital infrastructure, AI-led innovation and technology-enabled productivity is both timely and necessary."

Execution will determine success

Whilst industry leaders have praised the budget's vision and allocations, several emphasised that effective implementation will be crucial to translating policy intent into tangible outcomes.

Kundra of Devnagri noted, "Real impact will depend on execution, specifically lowering compute costs, expanding domestic data-centre capacity, enabling language-first AI systems, and building high-quality Indian datasets anchored in data dignity, consent, and trust."

The budget's comprehensive approach to technology, manufacturing, and skill development has been viewed as laying the groundwork for India's emergence as a global leader in electronics, semiconductors, and artificial intelligence over the coming years.