Union Budget 2025: What Experts Expect for India's Startup Ecosystem

Discover key budget expectations from industry experts across startups, AI, fintech, manufacturing, edtech, and more as India awaits Union Budget 2025-26. Insights on tax reforms, sustainability, digital transformation, and job creation.

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Union Budget 2025: What Experts Expect for India's Startup

As India gears up for the Union Budget 2025-26, expectations are running high across industries. Finance Minister Nirmala Sitharaman is set to present a budget that could shape the country’s economic trajectory for years to come. From boosting innovation in manufacturing and education to strengthening the startup ecosystem and sustainability initiatives, industry leaders are hopeful for transformative policies.

With India's startup ecosystem maturing and new technologies emerging at an unprecedented pace, the budget presents an opportunity to address challenges and unlock the next phase of growth. TICE spoke to founders, investors, and business leaders to understand what they expect from the Union Budget.

Budget Expectations

Strengthening India's Manufacturing and Green Economy

Ankit Kedia, Founder and Lead Investor, Capital-A

India’s manufacturing sector stands at a critical juncture, and Budget 2025 could be a game-changer in enhancing global competitiveness. Ankit Kedia believes that smart factory technologies, AI, and automation should be at the core of the government's policy framework.

"Extending the Production Linked Incentive (PLI) scheme and offering infrastructure development grants for advanced manufacturing can empower Indian manufacturers to embrace new technologies and boost operational efficiency. Addressing ESOP taxation will be crucial for talent retention, and introducing a green investment framework can support sustainable manufacturing and circular economy innovations," Kedia suggests.

Read More: Union Budget 2025: What Experts Expect for India's Startup Ecosystem

AI and EdTech: The Future of Learning Needs More Investment

Mridu Andotra, Founder & CEO, GeniusMentor

With AI poised to revolutionize education, Mridu Andotra emphasizes the need for a dedicated budget for AI integration in schools and colleges.

"While INR 10,300 crore was allocated to the IndiaAI Mission last year, a specific fund for AI in education is essential. Investing 5-10% of the education budget into AI-driven learning infrastructure, upskilling teachers, and setting up AI labs in schools will position India as a global leader in AI education. China and the US are making significant investments—India must not lag behind," Andotra asserts.

The Circular Economy: A Golden Opportunity for India

Yug Bhatia, Founder & CEO, Control Z

As India's e-waste management industry is set to touch $7.5 billion by 2025, Yug Bhatia calls for policy interventions to boost the circular economy.

"The government should introduce tax incentives for refurbishment and recycling businesses while funding R&D for sustainable technology. Public awareness campaigns on refurbished products can drive consumer behavior change and encourage sustainable consumption," Bhatia explains.

Read More: Budget 2025: Is India Ready to Rewrite Startup Investment Rules?

Tax Reforms to Drive Investments and Economic Growth

Ajay Lakhotia, Founder & CEO, StockGro

Lakhotia advocates for tax reforms to boost disposable income and encourage investments.

"A higher standard deduction in income tax and an increased LTCG exemption limit to ₹5 lakh can provide relief to middle-class families. Reducing the Securities Transaction Tax (STT) and expanding capital gains exemptions under Sections 54 and 54F will create a stronger investment ecosystem," he suggests.

Fintech, BFSI, and MSME Reforms: A Roadmap for Growth

Krishna Vij, VP, TeamLease Digital

The BFSI sector is looking for transformative reforms, and Krishna Vij highlights key areas of focus:

"A dedicated refinance mechanism for NBFCs, simplified property transactions for NRIs, and improved lending access for MSMEs, agriculture, and infrastructure sectors will be crucial. Fintech lending is expected to grow, and policy support for AI-driven decisions and blockchain can ensure India remains at the forefront of financial innovation."

Employment and Skilling: The Need for an Employment Linked Incentive (ELI) Scheme

Neeti Sharma, CEO, TeamLease Digital

Sharma emphasizes the need for labor-intensive job creation:

"An Employment Linked Incentive (ELI) scheme can boost hiring in manufacturing, EVs, and renewable energy. Supporting MSMEs and gig workers, along with regional job creation in Tier 2 and Tier 3 cities, will be essential. The government must align these efforts with existing programs like PLI to ensure impact."

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Encouraging Investments in Emerging Tech and Digital Infrastructure

Rohan Bhargava, Co-Founder, CashKaro & EarnKaro

India needs to focus on cutting-edge technology investments to stay globally competitive.

"Increasing funding for AI, 5G, and semiconductor R&D will not only drive innovation but also attract top talent. A strong data protection framework will be critical in building consumer trust, enabling responsible data usage, and fostering digital economy growth," Bhargava asserts.

Retail Sector: Need for a National Retail Policy and Digital Transformation

Varun Tangri, Founder & CEO, QueueBuster

Retailers expect faster implementation of the National Retail Policy. Tangri highlights key areas of focus:

"Access to low-interest financing, tax breaks, and incentives for digital transformation in retail are crucial. Supporting retail tech solutions will improve operational efficiency and drive sectoral growth."

Supporting Startups, Alternative Credit, and the Green Economy

Ankur Bansal, Managing Director, BlackSoil

For startups, alternative credit solutions and sustainability incentives will be game-changers.

"Flexible financing options such as venture debt and working capital solutions must be prioritized. Substantial investments in EV infrastructure, climate tech, agritech, and deeptech will ensure India remains at the forefront of the green economy. Additionally, reforms to strengthen GIFT IFSC as a global financial hub will attract more foreign capital," Bansal explains.

Mobility, Auto, and Tax Incentives for Growth

Narain Karthikeyan, Founder, DriveX

The auto sector expects initiatives to boost affordability and sustainability.

"Urban demand for automobiles is slowing, and tax reforms can help boost disposable income. Targeted incentives like interest subsidies for refurbished vehicles and lowering GST on pre-owned cars will enhance affordability. Additionally, financial support for automotive and mobility startups can drive innovation and job creation," Karthikeyan states.

Final Thoughts: A Defining Budget for India's Future

With India's economic ambitions growing, the 2025 Union Budget is expected to address key challenges while fueling innovation. From AI-driven education and circular economy incentives to tax reforms and job creation, stakeholders across industries are optimistic about impactful policy announcements. If the government delivers on these expectations, India's startup ecosystem, manufacturing sector, and digital economy will be well-positioned to lead the next phase of global growth.

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