The Union Budget for 2025 has introduced a significant increase in funding for crucial technology sectors, particularly in electronics, semiconductors, and artificial intelligence (AI), as part of the government’s strategy to strengthen India’s digital and manufacturing capabilities. The allocation for production-linked incentives (PLIs), semiconductor projects, and the IndiaAI Mission has seen a sharp 84% rise, taking the total budget to ₹18,000 crore for the fiscal year 2025-26, a substantial jump from ₹9,766 crore in the previous year. This increase reflects the government’s commitment to fostering domestic manufacturing, technological self-reliance, and global competitiveness in these rapidly evolving industries.

One of the most notable areas of investment is the semiconductor sector, which has received a budgetary boost of more than double the previous allocation. The funding for semiconductor initiatives has now reached approximately ₹2,499.96 crore, a significant jump from ₹1,200 crore in the revised budget for the current fiscal year. This increased allocation supports multiple semiconductor projects, aligning with the government’s broader investment commitment of ₹1.52 lakh crore to develop India’s semiconductor ecosystem. The push for domestic semiconductor manufacturing is crucial in reducing dependence on imports and positioning India as a key player in the global semiconductor supply chain. Another major beneficiary of this increased funding is the IndiaAI Mission, which aims to build a robust AI ecosystem in the country. The budget for this mission has surged more than elevenfold, soaring to ₹2,000 crore from just ₹173 crore in the previous year. This substantial increase will be used to enhance AI computing infrastructure, support research and innovation, and develop AI-driven applications across various industries. The government’s focus on AI signifies its recognition of the technology’s potential to drive economic growth, improve governance, and enhance efficiency across multiple sectors, including healthcare, education, and cybersecurity.

The Ministry of Electronics and IT (MeitY) has also received a significant boost, with its overall budget increasing by approximately 48%, reaching ₹26,026.25 crore for the 2025-26 fiscal year, up from ₹17,566.31 crore in the prior year. This funding will support a range of technology-driven initiatives, including mobile phone production, IT hardware development, and digital infrastructure projects. One of the largest allocations under this budget is for the PLI scheme focused on large-scale electronics manufacturing. Approximately ₹8,885 crore has been designated for this scheme, with a strong emphasis on boosting mobile phone production in India. Major electronics manufacturers such as Foxconn and Tata Electronics are expected to benefit from this initiative, further strengthening India’s position as a global electronics manufacturing hub.

In addition to these allocations, the budget has also increased funding for compound semiconductors, sensors, and chip assembly projects by 56%, bringing the total to ₹3,900 crore from ₹2,500 crore in the previous fiscal year. These investments highlight the government’s commitment to building a comprehensive semiconductor ecosystem, which is essential for the development of advanced electronic devices, 5G technology, and emerging innovations in the Internet of Things (IoT). Overall, the substantial budgetary expansion underscores the government’s strong push to accelerate India’s technological advancement, boost domestic manufacturing, and position the country as a leader in key sectors such as AI, semiconductors, and electronics. By enhancing funding for critical initiatives, India aims to strengthen its digital economy, reduce dependency on imports, and foster innovation-driven growth in the years to come.

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