Why India’s AI, DeepTech and Energy Sectors Are Betting on Budget 2026

New Delhi: As the Union Budget 2026–27 approaches, set for presentation on 1 February 2026, India’s technology and infrastructure leaders have issued a unified demand. They want a shift from volume-led growth to innovation-led competitiveness backed by deep tech, AI, R&D incentives and resilient energy systems.

Industry leaders say India has achieved digital scale. They now argue the country must pursue digital leadership and match it with power infrastructure that can support next-decade technologies.

A Turning Point for India’s Digital Decade

Over the past decade, India built one of the world’s most extensive digital public infrastructure stacks and became a massive digital marketplace. But as Budget Week nears, expectations are sharpening.

Leaders say scale alone is no longer enough. They expect the next phase of growth to be driven by compute depth, AI capability, cybersecurity, R&D intensity, IP monetisation and domestic markets for frontier technologies.

This Budget comes as India navigates global volatility, geopolitical shifts and a race for leadership in DeepTech, advanced manufacturing and clean energy.

From Digital 1.0 to Digital 2.0

Nandagopal P — CEO of Asymmetri, CTO of venture-builder Gacsym Ventures, and LP at DeepTech-focused Arya Ventures — framed the moment clearly.

“India is approaching Budget 2026 at a stage where its vast digital scale must now evolve into true global digital leadership… This Budget is a defining moment to move from a ‘Digital Economy 1.0’ driven by access and scale, to a ‘Digital Economy 2.0’ driven by innovation, deep tech, and sovereign digital capacity.”

He welcomed the ₹1 lakh crore RDI scheme but noted that capital alone will not create technology champions without IP commercialisation pathways, R&D tax incentives and support for DeepTech venture funding.

“If Budget 2026 gets this right, India can shift from being a large digital market to becoming a true digital superpower.”

Analysts say the RDI Scheme, paired with ANRF and PLI, could help India close the innovation gap with global leaders if demand-side adoption policies follow.

Energy as the Innovation Backbone

Raj Kumar Medimi — Executive Director of Trinity Cleantech, a domestic manufacturer of electrical and power infrastructure equipment — pointed to the physical backbone that supports innovation.

“The upcoming Union Budget presents a critical opportunity to strengthen the country’s power and energy infrastructure at the grassroots level.”

He stressed the need for T&D upgrades, transformer modernisation, PLI continuity and stricter quality enforcement to reduce losses and support domestic manufacturing.

“A Budget that balances infrastructure expansion with quality, efficiency, and domestic manufacturing will not only support energy security but also enable sustainable and inclusive growth.”

Energy experts say resilient grids and low-loss equipment will power future industries including data centers, gigafactories and green mobility.

AI Moves from Emerging to Essential

Chanakya Bellam — Board Member at AION-Tech Solutions, a developer of AI-driven platforms and cloud enterprise systems — said AI has moved from emerging technology to economic foundation.

“Strategic investments in artificial intelligence, machine learning, full-stack digital platforms, business intelligence, and cloud infrastructure will be critical for sustained economic growth, job creation, and global competitiveness.”

He called for R&D incentives, public-private partnerships, digital skill development and responsible frameworks that balance innovation with security, ethics and privacy.

Analysts expect AI, cloud and data to drive major productivity gains between 2026 and 2035 if skilling and compute capacity scale quickly.

DeepTech Faces an Adoption Test

Dr. Sunil Shekhawat — Co-Founder & CEO of SanchiConnect, a platform linking DeepTech startups, enterprises and investors across AI, quantum, spacetech, semiconductors and advanced materials — said India must now focus on market deployment.

“We expect to hear top up policies to support market development and adoption initiatives… The government has already done it for the drone industry and we expect similar approaches for quantum, AI, spacetech, material sciences, semiconductors and more.”

He warned that without market creation, geopolitical instability could threaten India’s DeepTech ecosystem and stall commercialisation.

Investors agree that market development policies are now as important as R&D subsidies, especially in strategic sectors.

Rewriting India’s Growth Playbook

With expectations rising across sectors, attention now turns to the broader economic question. Industry leaders say Budget 2026 is a strategic turning point. To unlock Digital Economy 2.0, India must align R&D incentives, DeepTech venture capital, AI-driven productivity, digital PPP models, IP commercialisation, compute capacity, PLI continuity, quality enforcement, power modernisation, MSME liquidity and workforce skilling. If executed well, India could evolve from service provider to innovation exporter, with DeepTech as a competitive moat and energy resilience as a strategic multiplier.

A $5 Trillion Test

As India pursues a $5 trillion economy and a stronger role in global supply chains, Budget 2026 will test whether policy can accelerate adoption, market creation and industrial competitiveness fast enough to shape the 2030s. For industry, the moment is not merely fiscal. It is geopolitical, generational and strategic. The question is no longer whether India can catch up, but whether India can set the pace. Tech and energy leaders argue that innovation without infrastructure cannot scale, and infrastructure without innovation cannot lead. They say the Budget must bring both together and enable India not just to participate in the next decade of global growth, but to define it.

All eyes now turn to 1 February 2026. The world is watching India’s Budget 2026 — and so is industry.