With the Union Budget 2025 on the horizon, stakeholders across India’s technology sector are eagerly awaiting announcements that could provide much-needed momentum to the nation’s digital transformation journey. As India works to solidify its standing as a global tech powerhouse, industry leaders expect that the budget will introduce policy measures aimed at fostering innovation, enhancing infrastructure, and promoting financial and digital inclusion. From data centres and AI development to Web3 and emerging technologies, businesses across the country are laying out a roadmap for long-term growth and sustainability.

This year, the expectations are especially high as technological advancements continue to drive India’s economic development. Leaders have underscored the need for a comprehensive approach to incentivise R&D, streamline regulatory frameworks, and support domestic production. At the same time, there is a strong push for cybersecurity and digital asset regulation to ensure a secure, innovation-driven ecosystem. Here’s a detailed look at the sector’s key demands for Union Budget 2025, along with insights from various experts.

India’s fintech and digital payment ecosystem has been a critical enabler of financial inclusion, providing millions of people access to credit, savings, and payment solutions through digital platforms. However, as the sector evolves, industry leaders believe it is essential for the budget to introduce fiscal incentives that encourage wider adoption of digital transactions.

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“The upcoming Union Budget presents a critical juncture for India’s fast rising fintech and digital payments ecosystem. We anticipate measures that further incentivise digital transactions, potentially through tax breaks or subsidies for digital payment platforms and users,” said Rohith Reji, Co-founder and CEO at Neokred. He stressed that such incentives could reduce operational costs for digital service providers and improve affordability for consumers.

Beyond promoting transactions, Reji pointed to the budget’s potential to improve access to other financial services. “A focus on enhancing financial inclusion through digital means, including expanding access to credit and insurance products through digital channels, would be a welcome step,” he added. The sector also seeks greater regulatory clarity, especially concerning the Digital Personal Data Protection (DPDP) Act. “The government should address the evolving regulatory landscape for fintech, fostering innovation while ensuring consumer protection and financial stability,” Reji noted.

With an enabling policy environment, India’s fintech sector could reach new heights, further embedding digital services into the country’s economic fabric.

Robust data infrastructure is critical to realising India’s ambitions in AI and digital transformation. Industry experts are advocating for investments in data centres, renewable energy-powered technology, and other infrastructure essential to support high-performance computing and edge solutions.

“India’s AI ambitions depend on a robust data centre infrastructure, which is central to our digital economy. The upcoming budget presents a great opportunity to fuel this growth,” said Kanchan Ray, CTO of Nagarro. Ray suggested that targeted policies, including incentives for renewable energy and support for energy-efficient startups, would strengthen the country’s data infrastructure. “Addressing challenges like employment, land acquisition and skill gaps with collaborative efforts can unlock India’s untapped potential, enabling low-latency edge solutions and high-performance computing,” he explained.

Piyush Jha, Managing Director and Head of India and APAC at GlobalLogic, underscored the transformative potential of AI-driven technologies. “As India charts its digital future, it is imperative that the Union Budget prioritises the transformative potential of AI and data-driven technologies,” he said. Jha recommended that the government establish AI Centres of Excellence in Tier II and Tier III cities to democratise access to AI education and innovation.

Additionally, Jha called for a regulatory framework that supports the responsible deployment of AI. “Targeted grants and a strategic roadmap for integrating AI across key sectors such as healthcare, manufacturing, and smart governance will be pivotal in driving long-term growth,” he said. With these measures, India could accelerate its progress in AI innovation and data infrastructure modernisation.

As India seeks to become a leader in electronics and semiconductor manufacturing, industry stakeholders are urging the government to expand production-linked incentive (PLI) schemes and reduce barriers to local production. The sector has identified semiconductors, batteries, and display technologies as critical areas for investment.

“The upcoming Union Budget holds immense potential to accelerate growth in the electronics and smartphone manufacturing industries,” said Arijeet Talapatra, CEO of itel India. He emphasised the importance of strengthening domestic production capabilities to reduce reliance on imports. “Expanding the PLI programme further to increase the allocation for semiconductors, high-capacity batteries, and display technologies will strengthen India’s value chain, reduce imports, and enhance our global competitiveness,” he explained.

Hareesh Chandrasekar, CEO and Co-founder of AGNIT Semiconductors, echoed similar concerns, urging the government to introduce measures that foster semiconductor manufacturing. “Measures like lower GST on indigenously manufactured components, reduced import duties on semiconductor-grade inputs, and zero to low interest funding for domestic companies can catalyse growth for home-grown semiconductor manufacturers,” Chandrasekar said. He further suggested initiatives to attract skilled NRI engineers and improve customs clearance processes for semiconductor materials.

With supportive policies in place, India could become a global hub for electronics and semiconductor production, driving job creation and technological self-reliance.

The Web3 and virtual digital asset (VDA) sector is pushing for a balanced regulatory framework that fosters innovation while ensuring transparency and investor protection. Leaders are also seeking lower taxes on digital asset income to encourage broader participation in the sector.

“As we approach the Indian Union Budget for 2025-26, the virtual digital asset (VDA) sector stands at a pivotal moment,” said Vishal Sacheendran, Head of Markets at Binance. “A balanced regulatory framework is key to unlocking the full potential of the VDA space in India,” he added.

Sacheendran noted that India has the opportunity to position itself as a leader in blockchain adoption by fostering an ecosystem that attracts global talent and investment.

Similarly, Raj Karkara, COO of ZebPay, pointed out that existing tax policies are limiting the sector’s growth. “Simplified tax structures can encourage wider participation while boosting liquidity and trading volumes,” he said. Karkara called for a revision of the current 30% tax on crypto income and the 1% TDS mechanism.

Anish Jain, Founder of W Chain, also highlighted the importance of infrastructure and skill development in the Web3 space. “Tax incentives for R&D and initiatives to upskill the workforce in blockchain and Web3 technologies are crucial for India to become a global leader in this space,” Jain said.

As digital connectivity expands, cybersecurity and 5G infrastructure have become vital components of India’s tech ecosystem. Experts are advocating for investments in these areas to safeguard critical infrastructure and drive innovation.

“The growing aspirations of India’s youth, driven by their pursuit of innovation, entrepreneurship, and a digital-first future, underscore the urgent need for robust cybersecurity measures and cutting-edge 5G infrastructure,” said Arijeet Talapatra of itel India. He explained that these investments would unlock opportunities in sectors like healthcare and smart cities.

Swapna Bapat, Vice President and Managing Director at Palo Alto Networks, reinforced the need for ongoing cybersecurity investments. “We look forward to continued investments in AI, cybersecurity up-skilling and innovation-led initiatives,” she said. Bapat noted that these measures are essential to protect both legacy and new digital systems in an increasingly connected world.

The emerging drone sector sees the upcoming budget as a chance to strengthen local manufacturing and R&D capabilities. Industry leaders are particularly focused on expanding the scope of the PLI scheme to include drone technology and related innovations.

“We expect Budget 2025 to take the emerging drone sector to new heights with a focus on innovation, R&D, training, and investment,” said Bodhisattwa Sanghapriya, Founder and CEO of IG Drones. He pointed out that the ‘Make in India’ initiative could reduce dependence on foreign imports by fostering indigenous solutions. “Expanding the PLI scope to include areas such as leasing, coding, and anti-drone systems will further enhance the value chain,” he explained.

By providing comprehensive support for emerging technologies, the government can position India as a hub for drone innovation and exports.

As India aims to lead the global digital economy, Union Budget 2025 could serve as a transformative milestone for the country’s tech sector. By addressing fintech growth, AI innovation, electronics manufacturing, Web3 regulation, cybersecurity, and emerging technologies, the government has the opportunity to unlock the sector’s full potential. With the right policies in place, India could achieve sustainable, inclusive growth driven by technology and innovation.

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Union Budget 2025: India’s tech sector is all charged up for an AI-led digital revolution