/vnd/media/agency_attachments/bGjnvN2ncYDdhj74yP9p.png)
/vnd/media/media_files/2026/01/23/indian-budget-2026-27-3-2026-01-23-20-48-41.jpg)
With the Union Budget 2026–27 approaching, expectations are rising across India’s technology sector for policy measures that strengthen the country’s digital foundations and support the next phase of growth in artificial intelligence, cloud computing and data-led services.
While India’s digital transformation has gathered momentum over the past decade, industry leaders argue that future progress will depend on how securely and inclusively emerging technologies are scaled across sectors, particularly beyond large enterprises and metropolitan centres.
Sovereign cloud and cybersecurity move up policy agenda
According to Pinkesh Kotecha, Chairman and Managing Director at Ishan Technologies, cybersecurity and sovereign cloud infrastructure must now be viewed as strategic national assets rather than supporting tools. As sensitive workloads in banking, government and critical infrastructure increasingly migrate to the cloud, he said higher budgetary allocations for secure, sovereign cloud environments and stronger security standards would be timely.
“Cybersecurity and sovereign cloud infrastructure need to be treated as strategic assets, not just technology enablers,” Kotecha said, adding that structured public–private collaboration would be essential to improve national cyber readiness.
Kotecha also stressed the importance of supporting Indian service providers building compliant, sovereign infrastructure to reduce external dependencies and strengthen national digital resilience.
Connectivity gaps persist beyond major metros
Despite improvements in large cities, enterprise-grade digital access in Tier 2 and Tier 3 regions continues to lag, limiting participation from manufacturing clusters, healthcare institutions, financial services firms and government offices. Kotecha said measures to improve the commercial viability of regional internet service providers, accelerate last-mile fibre deployment and enable sustainable network expansion would help close persistent access gaps.
AI-driven data centre growth raises sustainability concerns
Sustainability is also emerging as a policy priority as AI workloads drive higher energy consumption in data centres. Kotecha noted that targeted fiscal support for renewable energy adoption, efficient cooling technologies and green ICT research would be critical to managing the environmental footprint of digital infrastructure.
Parallel to infrastructure development, industry leaders are calling for stronger investment in skills across cybersecurity, networking, cloud and AI, along with clearer guidance on responsible AI and data governance. Such measures, Kotecha said, would give enterprises greater confidence to innovate at scale.
MSME adoption emerges as key focus area
Similar expectations are being echoed across the broader technology ecosystem. Tarun Wig, Co-Founder and Chief Executive Officer of Innefu Labs, said the upcoming budget presents an opportunity to accelerate AI and deep-tech adoption across sectors, particularly among micro, small and medium enterprises (MSMEs), where adoption continues to trail that of larger organisations.
Avinash Kumar, COO, DJT Microfinance added,“As we look toward Union Budget 2026, we anticipate a strategic focus on expanding affordable credit for MSMEs and the underserved. Microfinance institutions are the engine of rural demand; however, to scale effectively, we need a significant reduction in funding friction and the removal of operational bottlenecks. We call for dedicated refinance windows to lower costs for NBFCs and a simplified, extended MUDRA framework to ease balance sheet stress. Ultimately, aligning fiscal policy with RBI’s digital norms and streamlining compliance will be the key to fostering borrower trust and empowering low-income entrepreneurs.”
Budget support sought for AI, cyber and data governance
Wig said targeted interventions, such as tax incentives for AI-led solutions, improved access to secure cloud infrastructure and expanded skilling programmes, could help modernise MSME operations, strengthen cybersecurity resilience and support job creation. “There is significant potential for budgetary support in areas such as artificial intelligence, cybersecurity, data analytics and trusted data governance frameworks,” he said.
He also pointed to the importance of aligning budget policies with national initiatives such as the IndiaAI Mission and the Digital Personal Data Protection Act, arguing that regulatory clarity would help build investor confidence while reinforcing commitments to responsible and ethical innovation.
Industry leaders broadly agree that a budgetary focus on sovereign cloud infrastructure, secure connectivity, sustainable digital systems and workforce development would help position India for its next phase of digital growth, one driven not just by adoption, but by resilience, trust and long-term capability building.