From fiscal math to tech sovereignty strategy

Capital discipline, targeted incentives and ecosystem bets reposition technology as a sovereign asset shaping India's long-term economic power.

- BY JAIDEEP GHOSH

The Union Budget 2026-27 is a well thought-through extension of prior fiscal blueprints. Building on the 2025 reforms, this budget reinforces policy continuity, signalling predictability to investors amid global volatility. Rather than hype and new announcements, it embeds technology as an enabler across economic pillars, fostering competitiveness in AI-driven tech, semiconductors, and telecom.

The philosophy here is a shift from service to sovereignty. India is moving beyond just writing code for the world to owning the compute, the silicon, and the energy that powers it. The Finance Minister, Nirmala Sitharaman, has effectively declared that for India, technology is no longer just a service sector to be exported, but a sovereign asset to be secured.

The tax holiday until 2047 signals India's ambition to host global AI workloads, shifting from a consumption market to a compute jurisdiction.

The fiscal backdrop sets the stage. By sticking to the fiscal glide path and bringing the Fiscal Deficit down to 4.3% of GDP, the government has delivered a “Good Deficit.” The borrowing is not fuelling consumption; it is fuelling a record Rs 12.2 lakh crore in Capital Expenditure. For capital-intensive sectors like telecom and tech infrastructure, this fiscal discipline is the best news; it signals macroeconomic stability, potentially lowering the cost of capital for the massive 5G and 6G network rollouts still ahead.

But the real signal lies in the specific, targeted interventions that aim to build what may be described as India’s “Sovereign Tech Stack”—from the minerals to the cloud.

CLOUD INCENTIVES AND DATA GRAVITY PLAY

The most significant geopolitical signal in the budget is buried in the tax proposals: a Tax Holiday until 2047 for foreign companies providing global cloud services using Indian data centres. This is a masterstroke.