The Indian government has made headlines with its ambitious Union Budget for 2025-26, presenting multifaceted economic initiatives aimed at bolstering the nation’s manufacturing and technology sectors.
Finance Minister Nirmala Sitharaman unveiled the budget, which showcases an impressive allocation of ₹18,000 crores ($2.4 billion) for Production Linked Incentive (PLI) schemes related to mobile phones, IT hardware, and semiconductor projects—an increase of 84% from the previous year. This decision aims to position India as a global hub for electronics manufacturing and to respond to the rising global demand for electronic goods.
Of note is the allocation for initiatives focused on artificial intelligence, which saw its budget increase by more than eleven times to ₹2,000 crores under the ‘IndiAAI Mission.’ The government is determined to develop the AI ecosystem and improve India’s competitiveness within the global tech sphere.
“The comprehensive allocation for the Electronics and Information Technology (IT) Ministry now stands at ₹26,026.25 crores—a nearly 48% rise from last year's allocation. This demonstrates the government's clear commitment to leading the electronics and IT sectors,” explained Ashwini Vaishnav, Minister for Electronics and IT.
The PLI scheme has emerged as pivotal to boosting large-scale manufacturing, especially for major electronics manufacturers with key players like Foxconn, Tata Electronics, and Dixon Technologies benefiting significantly from this initiative.
This year, the PLI scheme’s budget is marked at ₹8,885 crores, with mobile phone production receiving the lion’s share. An exciting highlight from the budget includes the doubling of the allocation for semiconductor projects—from ₹1,200 crores to ₹2,499.96 crores—emphasizing the government’s intentions to tap India’s semiconductor potential.
The government asserts this increase signifies a proactive strategy to attract investments, as it has already secured commitments worth ₹1.52 lakh crores for semiconductor projects, underlining investor confidence.
“Semiconductors are the backbone of modern technology, and increased budget allocations not only work toward self-sufficiency but also catalyze advancements across numerous sectors,” commented industry experts.
To support the broader Manufacturing sector, significant initiatives were included, such as the National Manufacturing Mission, which received an 89% increase to reach ₹16,092 crores compared to previous fiscal years. This mission aims at producing quality goods across varied industries, focusing on Micro, Small, and Medium Enterprises (MSMEs) as local engines of economic growth.
Dilip Sawhney, Managing Director of Rockwell Automation India, remarked on the positive impact of budget allocations to MSMEs, which are integral to India’s economic narrative.
The budget will also see structural changes, such as the introduction of new tax brackets which will significantly reduce tax burdens for those earning up to ₹12 lakh annually. Senior citizens will benefit from doubled TDS limits, aiming at enhanced disposable incomes for the middle class.
“What we aim for with our revised tax structure is to provide substantial reductions for the middle class,” Sitharaman elucidated during her budget speech.
Noteworthy mentions also included the announcement of the modified UDAN scheme, aimed at improving regional connectivity—especially pertinent to the aspirations of the Northeastern states, as noted by various state leaders.
Assam Chief Minister Himanta Biswa Sarma praised the historic allocation for establishing a 12.7 lakh metric tonnes urea plant, fulfilling long-standing demands for agricultural self-sufficiency and technological empowerment. “This will be transformative for the Northeast, enabling us to utilize our resources efficiently,” he stated.
The budget’s strategic inclusivity extends to developing talent through skill centers and emphasizes clean energy through various initiatives, including nuclear energy projects expected to generate 100 GW by 2047, facilitating India’s transition to sustainable energy.
Further details revealed significant customs duty cuts on imported components for electronics and electric vehicles, making products more affordable and driving local production. The Basic Customs Duty on mobile phones saw reductions from 20% to 15% alongside the complete exemption of duties on certain electronic parts.
Prime Minister Modi characterized the Union Budget as “people-centered,” reflecting hopes for accelerated growth and economic revitalization across the country.
“This budget is not just about numbers; it encapsulates our vision for India’s future as a self-reliant nation tapping its potential across various sectors,” Modi concluded.
Overall, the Union Budget for 2025-26 is positioned as transformational, combining significant financial commitments with strategic initiatives aimed at fostering innovation and competitiveness, effectively laying down the groundwork for India’s sustained economic success.