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Budget 2025: Industry voices for digital infrastructure, AI, and strategic growth

Budget 2025-26 is expected to come with promises to boost India’s digital economy with key reforms in telecom, AI, semiconductors, and data centers, driving innovation and sustainable growth.

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Punam Singh
New Update
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As India inches towards Budget 2025-26, the government’s financial blueprint, industry leaders from across sectors are sharing their insights and expectations. Their views share an optimistic approach with a focus on digital transformation, AI-driven growth and infrastructure development. Whereas, it also adds a sense of urgency to act upon measures required to position India as a global leader in technology and innovation.

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Telecom sector: A foundation for digital transformation

The telecom sector remains at the heart of India's digital transformation journey, driving the nation’s ambitious ‘Digital India’ vision and supporting the growth of a USD 5 trillion digital economy. However, critical operational challenges continue to hinder progress.

Manoj Kumar Singh, Director General of the Digital Infrastructure Providers Association (DIPA), highlighted persistent disparities in electricity tariffs, which impose an additional operational burden of INR 5,000 crore annually on infrastructure providers. He called for uniform electricity tariffs across states and union territories, similar to policies already implemented in Maharashtra, Himachal Pradesh, and Haryana. The telecom sector also faces challenges related to inconsistent power supply and exorbitant costs for new electricity connections, especially in regions like Sikkim.

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In terms to address these concerns, DIPA has proposed some targeted measures, which includes:

  • Reclassifying telecom towers as "Plant and Machinery" and increasing depreciation rates for batteries from 15% to 65% would align tax policy with operational realities.
  • Expanding the Digital Bharat Nidhi to strengthen connectivity in remote areas and upgrade existing infrastructure.
  • Amending Section 16(5) to allow input tax credit (ITC) on telecom towers until November 2025 could alleviate financial strain and promote investment in infrastructure.

As stated by DIPA reforms would not only accelerate the rollout of 5G and future 6G technologies but also create a robust backbone for India’s digital economy.

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AI and semiconductor development: Strategic autonomy amid global challenges

India’s AI and semiconductor ambitions have been in the spotlight in recent times, particularly in the wake of new export controls introduced by the Biden administration. These restrictions could impede access to advanced AI chips, impacting the country's ability to scale AI infrastructure.

Dr. Ajai Chowdhry, Founder of HCL and Chairman of EPIC Foundation, emphasized the urgency of fostering self-reliance in semiconductor and AI technologies. He stated, "India must take up semiconductor chip development in mission mode, leveraging RISCV technology to secure itself from future sanctions". He has advocated for increasing funding under the Design Linked Incentive (DLI) scheme, extending its benefits to startups, MSMEs, and large corporations to create an indigenous ecosystem for chip manufacturing.

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Similarly, Ashok Chandak, President of IESA, depicted his concern that restricted access to advanced AI chips could raise procurement costs and slow innovation. He has stressed upon the importance of securing licenses under the National Validated End User (NVEU) framework and incentivizing domestic innovation to mitigate long-term challenges.

These measures, coupled with enhanced tax incentives for semiconductor manufacturing and AI R&D, could ensure India’s strategic autonomy in critical technologies while fostering global competitiveness.

Data centers and digital infrastructure: Meeting the surge in demand

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The explosive growth in data consumption and the increasing adoption of 5G, IoT, and AI-driven technologies have highlighted the need for robust digital infrastructure. Sudhir Kunder, Chief Business Officer at DE-CIX India, has highlighted the urgent need for investments in energy-efficient data centers and regional interconnection facilities to bridge digital gaps in tier-2 and tier-3 cities.

Kunder also emphasized the importance of promoting sustainability in the sector through subsidies and tax incentives for renewable energy adoption. "Budget 2025 should prioritize investments in infrastructure to support India’s digital economy goals and accommodate rising data demands," he stated.

Furthermore, fostering R&D in emerging technologies such as edge computing and AI-driven network systems could position India as a global hub for digital innovation.

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Shaping India’s digital future

The Budget 2025-26 holds a lot of expectations towards shaping India’s digital future. While boosting investments in data centers, telecom sector, AI deployment and the semiconductor sector could be a key to unlock the vast potential of the country’s digital economy, targeted reforms and strategic initiatives can drive India’s technological advancements forward.

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