The Union Finance Budget 2026-27, presented by Finance Minister Nirmala Sitharaman, has sent ripples across industries — particularly in India’s technology and IT sector. With strategic policy interventions aimed at accelerating digital growth, technological self-reliance, and global competitiveness, this Budget could be a pivotal milestone in India’s tech journey.
The Budget underscores IT and technology services as core drivers of India’s economic growth. The government explicitly recognises the digital ecosystem — from software development and IT services to cloud computing and artificial intelligence — as crucial to future economic expansion.
This shift signals a policy environment that not only supports innovation but also motivates businesses to scale up operations, expand exports, and strengthen India’s global presence in technology.
One of the most impactful changes for IT businesses is the increase in the safe harbour threshold for IT service providers. Previously capped much lower, the threshold has now been expanded significantly, providing easier tax compliance and reducing litigation for mid-sized and large IT firms. This change is expected to encourage investment and improve operational clarity across the sector.
A major announcement that could reshape India’s digital landscape is the long-term tax holiday (up to 2047) for foreign companies that provide services by leveraging data centres located in India. This proposal aims to:
The impact? Reduced hosting costs, greater foreign investment, and faster adoption of digital services by enterprises across sectors, including IT.
The Budget signals a shift toward cutting-edge tech with enhanced focus and funding for Artificial Intelligence (AI), semiconductor manufacturing, and digital infrastructure. This includes the launch of India Semiconductor Mission 2.0, aimed at strengthening domestic chip design and manufacturing capabilities — a critical component for future tech innovation.
For IT companies, especially those working on AI products, semiconductor tools, IoT and next-generation solutions, this policy support opens new avenues for growth and localisation.
India’s IT industry has generally welcomed the Finance Budget 2026-27, with industry leaders calling it a strong push toward reinforcing India’s role as a global technology and services hub. The clarity in policy direction and focus on innovation, exports, and digital infrastructure has been widely appreciated.
The Budget’s focus on technology translates into real benefits for professionals and startups:
The Finance Budget 2026-27 strategically aligns India’s fiscal priorities with the ambitions of the digital era. Through tax reforms, global investment incentives, and sector-focused support, it reinforces the IT sector as a cornerstone of economic transformation.
For businesses and tech professionals alike, this Budget not only provides opportunities but also challenges them to innovate and scale in a global marketplace.
Stay tuned to Radical Geeks for deeper analysis and expert perspectives on how these policies translate into actionable tech strategies.