India budget boosts tech, data centres & MSME support

India's latest Union Budget drew a positive response from technology, financial and skills-focused businesses, which pointed to signals of policy continuity, stronger incentives for data infrastructure and expanded support for micro, small and medium enterprises (MSMEs).

Executives from fintech, cloud services and skilling providers said measures around capital expenditure, data centres, digital infrastructure and creative industries could influence investment decisions and employment trends over the coming years.

The Budget comes at a time when India's data centre market, cloud adoption and MSME digitisation are expanding, and as policymakers seek higher-value jobs in areas such as animation, visual effects, gaming and comics (AVGC).

Reactions focused on tax treatment for foreign data centre investors, incentives for data-led financial systems and workforce development for the so-called Orange Economy.

The government maintained its emphasis on capital spending and infrastructure development, and introduced targeted proposals for both technology infrastructure and skills pipelines.

Industry leaders framed these steps as part of a longer-term policy trajectory rather than a one-off shift.

This aligned with expectations from sectors that depend on stable taxation and regulatory environments for planning large investments and skilling programmes.

Companies in lending technology and digital services also stressed the importance of reliable financial and operational data in expanding access to credit and new forms of employment.

They linked the Budget's infrastructure push with the need for robust digital backbones and data-sharing frameworks.

Market participants will study the fine print of implementation guidelines and timelines over the coming months.

MSME finance

Fintech leaders highlighted the Budget's focus on MSME development, alongside investment in technology and infrastructure, as a driver for credit growth and financial transparency.

The government announced support measures for what it describes as "Champion MSMEs" and steps aimed at widening access to credit for smaller firms.

"The Budget sends a clear signal of policy continuity with a strong focus on growth anchored in technology, infrastructure and MSME development. The emphasis on capital expenditure, support for Champion MSMEs and targeted measures to deepen credit access is likely to create positive multiplier effects across the economy. The announcements around data centres and digital infrastructure further strengthen the foundation for data-led financial systems. As lenders increasingly rely on technology and real-time insights to assess risk and expand credit, the availability of reliable financial data will be critical in enabling MSMEs to scale sustainably. Overall, the Budget reinforces confidence in a more transparent, efficient and inclusive credit ecosystem, aligned with our commitment to enabling smarter MSME finance," said Chirag Shah, Founder & CEO, Pulse.

Fintech firms expect demand for digital lending tools, data analytics and automation in underwriting processes to rise as MSMEs formalise operations and digital transaction trails deepen.

Industry observers say infrastructure and data initiatives can influence how lenders assess risk and price credit, especially for first-time borrowers and smaller enterprises.

Data centre push

Technology providers welcomed the Budget's signals for data centre and cloud investments, which they view as essential for both domestic and cross-border digital services.

The proposals include a tax holiday for foreign companies that set up data centres in India, which applies over an extended period.

The government also outlined a safe harbour margin for certain data services provided from India under related-party arrangements.

Executives in the sector said these measures could influence how global firms design their regional architectures and operating models.

They also noted that clarity on transfer pricing and long-term tax treatment reduces some of the uncertainty that has affected large-scale infrastructure projects.

Some providers expect increased interest in locating backup, disaster recovery and regional cloud zones within India as a result.

Others point to potential spillover demand for connectivity, power and local services around new data centre hubs.

Regulators will monitor how these incentives interact with data protection rules and localisation norms.

The relationship between local data storage, cross-border data flows and multinational cloud strategies is likely to remain a focus area.

Industry views indicated that firms are weighing both the financial incentives and compliance requirements.

This includes assessment of long-term cost structures, operational risks and talent availability in different Indian cities.

Technology integrators and system providers see opportunities in consulting and implementation as more foreign data centre operators evaluate Indian locations.

"The Union Budget sends a strong and reassuring signal for data centre and cloud investments in India. The proposed tax holiday till 2047 for foreign companies setting up data centres in the country provides long-term visibility and confidence for global players evaluating India as a strategic base for their cloud operations. The introduction of a defined safe harbour of 15% on cost for data services co-provided from India by related entities further brings clarity to cross-border operating models and reduces uncertainty around transfer pricing. Together, these measures simplify compliance, lower execution risk, and make it easier for companies to scale data centre and cloud-led services from India," said Mr. Umesh Shah, Director, New Age Technologies at Orient Technologies Limited.

Orange Economy

The Budget also addressed the Orange Economy, with a specific focus on the AVGC sector and skills development.

Measures included support for AVGC content creator labs in vocational and specialised institutions and initiatives to strengthen creative technology institutes.

The proposals build on ongoing programmes under the Skill India banner, which aim at industry-linked training.

Private training providers said these steps match industry expectations around the need for job-ready talent in creative fields.

The AVGC sector forecasts significant demand for trained professionals over the coming decade.

Stakeholders in education and skilling are examining how curricula and training infrastructure can reflect changes in production pipelines and tools.

They are also studying models for partnership between government schemes, academic institutions and private skilling companies.

Industry players noted that emerging technologies and new formats in gaming, animation and interactive media require continuous curriculum updates.

They view the Budget's AVGC focus as a basis for long-term collaboration on content, faculty development and apprenticeships.

"The Union Budget 2026 clearly recognizes the Orange Economy, particularly the AVGC sector, as a strategic employment and growth engine for India. Measures such as setting up AVGC content creator labs across vocational training and specialized institutes, strengthening creative technology institutions, and the continued thrust under Skill India reflect a strong focus on industry-aligned, job-ready skilling. With the AVGC industry expected to require over 2 million skilled professionals by 2030, sustained hands-on training, curricula aligned with emerging technologies, and deep collaboration between government, academia, and skilling partners will be critical to building a globally competitive and future-ready creative workforce," said Mr. Sandip Weling, Whole-time Director and Chief Business Officer - Global Retail, Aptech Limited.