How Sitharaman's Budget 2026 is powering India's AI ambitions: Key points

Union finance minister Nirmala Sitharaman

Union finance minister Nirmala Sitharaman, in her 9th Budget, has provided fresh impetus to India’s ambition of becoming a global artificial intelligence hub, announcing several measures to boost country’s tech infrastructure and talent pool.

Sitharaman said the government is seeking to meet the “aspirations of youthful India” with these new measures.

- Tax holiday until 2047 for foreign cloud providers using Indian data centers for global customers. To quality, they must provide it through an Indian reseller entity.

- India Semiconductor Mission (ISM) 2.0 launched with a major incentive expansion for electronics component manufacturing scheme

Jobs, TCS cuts, rail push: What Sitharaman's Budget 2026 means for common Indians

- Government ups semiconductor spending to Rs 8,000 crore for FY27, from Rs 4,300 crore

- MeitY outlay raised to Rs 21,633 crore for FY27, from Rs 20,232.95 crore

- Budget 2026 proposes to setup high-powered committee to recommend measures on the services sector

- Government proposes safe harbour margin of 15.5 percent for IT sector; expands threshold from Rs 300 crore to Rs 2000 crore

- Cutting-edge technologies, including AI applications, can serve as growth multipliers.

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- Setting up AVGC content creator labs in 15,000 secondary schools and 500 colleges.

- The consolidation of software development, IT‑enabled services, KPO and contract R&D into a single ‘IT Services’ category