Budget 2026–27: Tech sector seeks AI push beyond big firms

As the Union Budget 2026–27 approaches, expectations are mounting across India’s technology ecosystem for policy measures that go beyond incremental digital expansion and focus on scaling artificial intelligence and deep-tech innovation. While India’s digital transformation has gathered pace over the past decade, industry leaders argue that the next phase of growth will hinge on how effectively emerging technologies are deployed across a wider base of enterprises.

Bridging the AI adoption gap for smaller businesses

A key area of concern is the adoption gap between large enterprises and micro, small and medium enterprises (MSMEs). Despite contributing significantly to employment and economic output, MSMEs have been slower to integrate advanced technologies such as AI, data analytics and cybersecurity solutions. Industry executives believe targeted policy support could help bridge this divide.

“While India’s digital journey has achieved a certain degree of momentum, the next phase of growth will depend on how effectively these emerging technologies can be scaled across sectors, especially among MSMEs, where the pace of adoption still lags behind large enterprises,” said Tarun Wig, Co-Founder and Chief Executive Officer of Innefu Labs.

According to Wig, Budget interventions could play a critical role in accelerating adoption by making advanced technologies more accessible and affordable for smaller businesses. He pointed to measures such as tax incentives for AI-led solutions, improved access to secure cloud infrastructure, and an expansion of skilling programmes focused on modern digital capabilities.

“Such targeted policy interventions could help modernise MSME operations, enhance their cybersecurity resilience, and create more employment,” he said.

From the perspective of companies operating at the intersection of AI and national security, the stakes are particularly high. Innefu Labs, which works closely with national and cybersecurity agencies, sees scope for Budgetary support in areas including artificial intelligence, cybersecurity, data analytics and trusted data governance frameworks. These areas are increasingly viewed as strategic assets, not only for commercial growth but also for national resilience.

Industry participants are also looking for greater policy clarity and alignment with existing national initiatives. Expectations include Budget announcements that reinforce programmes such as the IndiaAI Mission and provide coherence with regulatory frameworks like the Digital Personal Data Protection Act.

Wig said aligning fiscal policy with these initiatives could help build long-term investor confidence while signalling a commitment to responsible and ethical innovation. “A visionary Budget that promotes indigenous innovations in deep tech will not only help attract global technology players but also enable Indian companies to develop solutions with a security-focused and globally resilient approach,” he added.

As policymakers prepare the final contours of the Union Budget, the technology sector will be watching closely to see whether AI and deep tech emerge as central pillars of India’s next growth chapter, particularly in extending the benefits of digital innovation to the country’s vast MSME base.