Ahead of the Union Budget 2026, tech leaders are seeking PLI extensions for smartphones, electronics, and semiconductors, along with a National Digital Infrastructure Mission and AI incentives. While deeper localisation and AI spending are expected to get a push, rising global chip costs may still drive smartphone and laptop prices higher despite possible duty cuts.
India's Finance Minister Nirmala Sitharaman is all set to introduce this year's Union Budget at the Parliament today. Indian tech leaders are highly optimistic with the budget, expecting GST rate cuts, extension of the PLI (Production Linked Incentive) Scheme, the formation of a 'National Digital Infrastructure Mission 2030', and much more.
The budget is expected to double down on manufacturing depth (components, semiconductors), pour resources into AI and digital infrastructure, and extend PLI schemes, though consumer prices for gadgets may still tick up due to global chip market dynamics beyond India's direct control.
Here's a low down on what are the big expectations from the Union Budget 2026 by the tech sector:
Smartphones and Mobile Manufacturing
The smartphone industry is pushing hard for the PLI (Production Linked Incentive) scheme to be extended beyond its current March 2026 deadline. Industry leaders are stressing that extending the smartphone PLI scheme and rolling out a strengthened PLI 2.0 will be vital to maintaining India's manufacturing momentum. The bigger ask is a shift from assembly to deeper localisation, executives from both domestic and international players say the next phase must move beyond finished-device assembly toward a stronger local supply chain for components, from memory and semiconductors to advanced processing hardware.
On pricing, here's the catch - despite duty reductions worth 1 to 2 percent, memory chip shortages and rupee depreciation are projected to push smartphone prices 4–9 percent higher across segments. Budget phones (Rs. 10,000 – Rs. 20,000) could see 4 to 6 percent increases, while flagships could rise 7 to 9 percent. The culprit, as we all know by now, is global memory chip inflation driven by AI data centre demand.
Electronics, Consumer Durables and Components
The PLI scheme for white goods has already attracted investment commitments of more than Rs. 10,000 crore, with expected production output crossing Rs. 1.7 lakh crore over the scheme period. Industry is now asking for the next step - rationalisation of customs and GST duties on key components, including compressors, and addressing inverted duty structures to improve cost competitiveness of locally manufactured appliances and electronics.
There's also a push for design-led manufacturing. Companies are calling for design-linked incentives, deeper component localisation, and easier access to working capital, alongside targeted incentives for batteries, power electronics, IoT hardware, and semiconductor-linked supply chains.
On the customs side, the industry expects the government could rationalise duty slabs from the current eight to around five or six categories, raise duties on non-essential imports, and correct inverted duty structures.
AI & Digital Infrastructure
This is arguably the biggest theme. Support for AI, cloud services, and cybersecurity is expected to feature prominently as policymakers look to accelerate digital transformation, with the budget expected to place greater emphasis on accelerating technology adoption among MSMEs through cloud computing, AI, SaaS platforms, and cybersecurity.
Major asks include a 'National Digital Infrastructure Mission 2030' to build scalable digital platforms, a 'Public Digital Infrastructure Fund' to support innovation and startups, and a 'National Data and AI Commons' to enable open and trusted access to critical datasets and AI resources.
With India's AI market projected to reach $17 billion by 2027 and cybersecurity spending expected to touch $3 billion, the industry is hoping to see meaningful tax incentives for companies investing in AI infrastructure and R&D. EY India is specifically recommending that the PLI scheme be extended to cover new technology sectors such as AI, space, and robotics, alongside public infrastructure investments in these futuristic areas.
Laptops & Crypto: Not Much Relief Expected
Laptops are already duty-free but are facing Rs. 5,000+ price hikes from component costs. On crypto, the 30 percent tax rate is likely to stay for Budget 2026 - the trend is toward structured regulation rather than tax cuts, with SEBI's proposed multi-regulator framework and FIU-IND compliance crackdowns signalling a maturing but tightly controlled ecosystem.
Semiconductors & Deep-Tech
The industry highlights that a continued policy push toward electronic components and semiconductor manufacturing is critical to ensure supply chain ecosystem development, and that the incentive outlay for MSMEs in electronic components remains limited - with MSMEs contributing approximately 25–35 percent of the industry, capital support is critical. Extending production-linked and infrastructure support to AI, robotics, and deep-tech manufacturing, and strengthening digital compute infrastructure to support AI adoption are both seen as priorities.
