Pre-budget Wishlist: “Pivot from viewing AI as a mere software vertical to treating it as strategic national infrastructure”

As India prepares for the Union Budget 2026, Artificial Intelligence has emerged as a central theme in industry expectations, moving well beyond experimentation into the realm of economic strategy. From enterprise automation and digital public infrastructure to skilling and compute capacity, businesses are looking to the government for policy clarity and targeted investments that can accelerate AI adoption at scale. With global competition intensifying and AI increasingly shaping productivity, competitiveness, and employment, this year’s budget is being closely watched for signals on how decisively India plans to position itself in the global AI race.

Read more: Pre-Budget Wishlist: What industry wants from India’s next budget

The Tech Panda asked AI industry players what their expectations are from the upcoming Union Budget 2026.

Akhil Nair, Founder & CEO, BigTrunk Communications

“Marketing has become a core growth driver of India’s digital economy, but policy support now needs to catch up with how the industry actually operates. As Indian agencies scale globally, the focus in the Union Budget must shift from broad intent to targeted enablement. AI-led marketing innovation and advanced analytics are no longer optional capabilities, they are essential for global competitiveness. Allocations that support AI and ML research for marketing use cases, along with incentives for MSMEs to adopt MarTech tools such as CRM, automation and analytics, can significantly accelerate maturity across the ecosystem. At the same time, simpler compliance frameworks and clearer taxation structures for digital service exports will help Indian agencies compete more effectively on the global stage. Continued investment in Digital Public Infrastructure will further strengthen omnichannel growth and reinforce India’s ambition to build world-class, export-ready digital businesses.”

Vikram M. Raichura, Founder & MD, Helo AI

“As India moves toward becoming an AI-first digital economy, the upcoming Union Budget is expected to focus on supporting technology-driven businesses, especially those working in AI, software, and enterprise communications. Building on the INR10,300 crore ($1.2 billion) IndiaAI Mission, the industry expects higher allocations and targeted incentives to accelerate AI research, product development, and adoption. Additionally, enhanced tax incentives and deductions for R&D and innovation, combined with policy measures to reduce operational expenses related to AI infrastructure, cloud usage, data processing, and digital compliance, can enable companies to invest more in AI, automation, and next-generation digital platforms.

Initiatives to create jobs, integrate AI education into academic curricula, and help Indian tech companies compete globally can further help transform India into a global AI hub.”

Srikanth Chakkilam, CEO and Executive Director, Covasant Technologies

“As AI adoption accelerates globally, we hope the Union Budget 2026–27 takes a forward-looking view on enabling next generation agentic AI companies from India. Access to affordable high performance AI infrastructure will be critical, especially for firms building autonomous systems that require significant GPU capacity to scale responsibly and compete globally. Targeted R&D tax credits and accelerated depreciation for AI hardware would significantly strengthen India’s innovation ecosystem.

We would also welcome the creation of regulatory sandboxes and clearer liability and data flow frameworks to enable companies to test autonomous agents in a controlled and compliant manner. Finally, public procurement opportunities for Indian AI firms, export incentives, and AI upskilling programs can help position India as a global hub for enterprise grade Agentic AI.”

Amit Kumar Tyagi, CEO, TrueReach AI

“As India stands at the cusp of an AI revolution, the upcoming Union Budget must pivot from viewing AI as a mere software vertical to treating it as strategic national infrastructure, akin to power or telecom. At TrueReach AI, our expectation is a budget that transitions India from an AI consumer to a global innovation hub.

First, to bridge the R&D gap—where India’s 0.7% GDP spend lags the 1.93% global average—we urge the restoration of the 200% weighted deduction for R&D. This is vital for deep-tech startups facing long-gestation cycles. Furthermore, democratizing AI requires a national ‘Compute Credit’ scheme and a 3-5 year customs duty holiday on critical hardware like GPUs and TPUs. Without affordable access to the ‘physical’ backbone of AI, Indian startups remain at a competitive disadvantage.

Capital remains the third pillar. Accelerating the INR20,000 crore Deep Tech Fund of Funds will provide the patient, long-term capital necessary to build foundational models. We also hope to see the PLI scheme extended to AI and Robotics, incentivizing domestic IP over foreign licensing.

Finally, we must solve for ‘Data and Talent.’ Establishing a structured India Dataset Platform for anonymized data and offering tax incentives for corporate upskilling are non-negotiable if we are to meet the demand for 1 million AI professionals by 2026. By simplifying compliance through a single-window system, the government can empower founders to focus on building world-class technology rather than navigating regulatory hurdles”

Akshay Chhabra, Chairman & Managing Director, 1Point1 Solutions

“As India accelerates its digital transformation journey, next-generation capabilities such as AI, analytics and data-driven platforms are fast becoming core economic growth engines. For sectors like IT-BPM and tech-enabled customer experience, AI is no longer experimental, it is central to improving productivity, decision-making, and global competitiveness.

Union Budget 2026 presents an opportunity to move from adoption to scale by laying out a clear roadmap for AI industrialisation. Focused support for R&D, investment-linked incentives, and policies that encourage private capital participation will be critical in building globally competitive digital enterprises.

Equally important will be accelerated development of data centre infrastructure, strong cybersecurity frameworks, and pragmatic data governance to enable large-scale enterprise AI deployment. With the right policy push, India can strengthen its position as a global hub for AI-led services, innovation, and high-value digital talent.”

Sachin Panicker, Chief AI Officer, Fulcrum Digital

“India stands at a pivotal moment in its AI journey, with the AI ecosystem entering a phase where scale, trust and global competitiveness will define the next decade, and the Union Budget 2026 should reinforce the nation’s ambition to become a global AI innovation hub. We expect the Budget to prioritise strategic investments in foundational infrastructure — particularly in world-class data centres, cloud ecosystems, and sustainable high-performance computing — that can unlock enterprise-grade AI adoption across sectors, efficiently and responsibly. Enhancing policy clarity and regulatory certainty for AI deployment and data governance will accelerate private-sector investment and innovation, while targeted incentives and support for R&D, early-stage AI ventures and domestic IP creation will help India move from being a consumer of global AI to a significant creator.

“Equally important is ecosystem-wide support, including robust skilling initiatives that prepare India’s diverse workforce for an AI-augmented economy, and alignment of AI frameworks with ethical and inclusive growth goals. By focusing on infrastructure, policy and human capital, the Union Budget can catalyse next-generation digital services to accelerate India’s transition into a globally competitive AI economy and ensure that India’s AI growth benefits every sector — from healthcare to manufacturing to public services.”

Vikram Labhe, Founder & CEO, Melooha

“We at Melooha view the Union Budget 2026–27 as a pivotal moment to accelerate India’s leadership in AI-driven consumer platforms and data-led digital services. As AI adoption deepens across sectors, policy emphasis on applied AI, scalable cloud infrastructure, and sovereign data ecosystems will be critical to building globally competitive digital-first businesses. Support for multilingual AI, vernacular computing, and responsible data frameworks can unlock mass-market personalisation at scale, particularly across India’s diverse user base. Incentives for AI-led SaaS innovation, digital skilling, and cross-border service exports will enable Indian platforms to expand globally while remaining rooted in trust and compliance. Simplified regulations and tax rationalisation for digital-native companies can further strengthen India’s position as a hub for next-generation AI-powered consumer technology.”