NEW DELHI: India’s latest budget has emerged as one of its most technology-focused, with new measures to utilize artificial intelligence, semiconductor manufacturing, and expand digital infrastructure aimed at offsetting the impact of global tariff wars.
Finance Minister Nirmala Sitharaman presented the 2026-27 budget in parliament on Sunday, saying it would “accelerate and sustain economic growth by enhancing productivity and competitiveness” at a time when India was facing “an external environment in which trade and multilateralism are imperiled and access to resources and supply chains are disrupted.”
New Delhi has yet to secure a trade deal with its largest trading partner, the US, which last year hit it with punitive tariffs of up to 50 percent over India’s purchases of Russian oil. To mitigate their impact, India has been looking for alternative agreements, including last week’s agreement with the EU, cutting duty on 99.5 percent of Indian exports to the bloc.
The new budget prioritizes infrastructure and domestic manufacturing, with a total expenditure estimated at $583 billion.
It offers tariff concessions for products from the marine, leather, and textile industries — all of which have been affected by US tariffs — and provides duty exemptions on materials and goods used to process rare-earth minerals, make lithium ion batteries, solar glass, and components for electric vehicles.
The finance minister also announced doubled spending for semiconductor manufacturing to $4.8 billion and a tax holiday until 2047 for foreign companies providing cloud services using Indian data centers.
The budget also features Bharat‑VISTAAR (Virtually Integrated System to Access Agricultural Resources), a multilingual AI‑powered platform for the agriculture sector to give farmers customized, real‑time advisory on crop management, weather, soil conditions and government schemes in different Indian languages.
“There is a lot of focus on AI and technology. It is to achieve the ambitious target India has already declared — Viksit Bharat 2047. It is very clear that without technology, it would be difficult to achieve that target,” Prof. Pardeep S. Chauhan, Centre for Economic Studies and Planning, Jawaharlal Nehru University, told Arab News, referring to the government’s plan to transform the nation into a fully developed country by 2047 — the 100th anniversary of its independence.
“That was the need of the hour, and the government has taken care of it, focusing on semiconductors, AI, and rare-earth minerals.”
The technology focus also comes against the backdrop of China’s dominance in the global critical minerals supply chains, and last year’s restrictions imposed by Beijing in the wake of escalating trade tensions with the US.
“India lags far behind the US and China, particularly China,” Chauhan said. “India has taken this move to maybe after five, 10, 15 years ... compete up to some extent. Without technology, nobody can think of establishing (their) leadership — whether it’s in the economy, defense or financial infrastructure architecture. Everywhere you need technology.”
