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The Union Budget 2026\u201327<\/strong><\/a> marks a decisive shift in India\u2019s economic and technology strategy, positioning the country for long-term leadership in semiconductors, cloud computing, artificial intelligence, and advanced manufacturing<\/strong>. Presented at a time when global supply chains are being restructured and digital infrastructure<\/strong> is becoming a strategic asset, the budget introduces targeted fiscal measures to strengthen domestic capability, attract global capital, and reduce India\u2019s reliance on imports.<\/span><\/p>\n \u00a0<\/p>\n From expanding the India Semiconductor Mission<\/strong><\/a> to offering unprecedented tax certainty for global cloud providers, the government has laid out a technology-driven roadmap aligned with the vision of <\/span>Viksit Bharat<\/span> and <\/span>Atmanirbhar Bharat<\/span>.<\/span><\/p>\n \u00a0<\/p>\n Energy transition remains a central pillar of the Union Budget 2026<\/strong><\/a>, with a clear emphasis on renewable infrastructure and energy storage manufacturing.<\/span><\/p>\n \u00a0<\/p>\n To support India\u2019s growing demand for clean energy, the government has proposed extending the <\/span>basic customs duty (BCD) exemption on capital goods used in Lithium-Ion battery cell manufacturing<\/strong>, a measure first introduced in the previous budget. This extension is expected to significantly lower production costs for battery storage systems\u2014an essential component for solar and wind energy scalability.<\/span><\/p>\n \u00a0<\/p>\n Further strengthening the solar ecosystem, the budget proposes <\/span>BCD exemption on sodium antimonate<\/strong>, a key raw material used in the production of solar glass. This move is aimed at boosting domestic solar manufacturing while reducing dependence on imported inputs.<\/span><\/p>\n \u00a0<\/p>\n In the consumer appliances segment, the exemption of customs duty on <\/span>specified microwave oven components<\/strong> aligns with the government\u2019s broader push for value addition and localisation within India\u2019s electronics manufacturing ecosystem.<\/span><\/p>\n \u00a0<\/p>\n One of the most consequential announcements in Union Budget 2026 is the long-term incentive framework for cloud computing and data centers\u2014sectors that are now critical to AI, fintech, governance platforms, and digital public infrastructure.<\/span><\/p>\n \u00a0<\/p>\n The government has proposed <\/span>tax holidays until 2047<\/strong> for foreign companies offering cloud services to global customers through <\/span>India-based data centers<\/strong>. This provides unparalleled long-term policy certainty and is expected to attract large-scale investments from hyperscalers and global SaaS providers.<\/span><\/p>\n \u00a0<\/p>\n By encouraging onshore data processing, the policy also aligns with India\u2019s <\/span>Digital Personal Data Protection (DPDP) Act<\/strong><\/a>, making compliance easier while strengthening data sovereignty.<\/span><\/p>\n \u00a0<\/p>\n To reduce litigation and compliance complexity, related-party entities providing data center services from India will now qualify for a <\/span>15% safe-harbour margin on cost. This move is widely seen as a trust-based regulatory reform that simplifies transfer pricing norms and improves ease of doing business for multinational technology firms.<\/span><\/p>\n \u00a0<\/p>\n In a move aimed at simplifying taxation for individuals, the budget proposes a significant reduction in customs duties on personal imports.<\/span><\/p>\n \u00a0<\/p>\n The <\/span>tariff rate on all dutiable goods imported for personal use has been cut from 20% to 10%<\/strong>, streamlining the customs structure and reducing costs for consumers. This rationalisation supports the broader \u201cEase of Living\u201d agenda while reducing friction in cross-border personal trade.<\/span><\/p>\n \u00a0<\/p>\n Building on the foundation of ISM 1.0, the government has officially launched <\/span>India Semiconductor Mission (ISM) 2.0<\/strong><\/a>, marking a shift from capacity creation to ecosystem depth.<\/span><\/p>\n \u00a0<\/p>\n The second phase focuses on strengthening the semiconductor value chain across three critical dimensions:<\/span><\/p>\n \u00a0<\/p>\n Equipment and Materials Manufacturing<\/p>\n \nEncouraging domestic production of semiconductor fabrication equipment, specialty chemicals, and advanced materials.<\/span><\/p>\n \u00a0<\/p>\n Full-Stack IP and Chip Design<\/p>\n \nMoving India up the value chain by developing indigenous intellectual property and design capabilities, rather than limiting participation to assembly and testing.<\/span><\/p>\n \u00a0<\/p>\n Supply Chain Resilience<\/p>\n \nBuilding robust, localised supply networks to reduce exposure to global disruptions.<\/span><\/p>\n \u00a0<\/p>\n ISM 2.0 will also support <\/span>industry-led research centres and training hubs<\/strong>, aimed at building proprietary technology and a highly skilled workforce capable of meeting the demands of advanced chip manufacturing and design.<\/span><\/p>\n \u00a0<\/p>\n The budget highlighted the strong industry response to the <\/span>Electronics Components Manufacturing Scheme (ECMS)<\/strong><\/a>, launched in April 2025 with an initial outlay of \u20b922,919 crore.<\/span><\/p>\n \u00a0<\/p>\n Given that investment commitments have already exceeded original targets, the government has proposed increasing the scheme\u2019s allocation to <\/span>\u20b940,000 crore<\/strong>. This expanded funding is expected to:<\/span><\/p>\n \u00a0<\/p>\n Deepen domestic component manufacturing<\/span><\/p>\n Reduce import dependence<\/span><\/p>\n Strengthen India\u2019s electronics supply chain<\/span><\/p>\n Support large-scale employment generation<\/span><\/p>\n \u00a0<\/p>\n The technology and manufacturing industry has broadly welcomed the Union Budget 2026, viewing it as a shift from scale-driven growth to capability-led development.<\/span><\/p>\n \u00a0<\/p>\n Leaders from smartphone manufacturing, consumer electronics, semiconductors, AI, cloud services, and education technology have highlighted the budget\u2019s emphasis on <\/span>long-term policy clarity, supply chain resilience, and indigenous IP creation<\/strong>.<\/span><\/p>\n \u00a0<\/p>\n Executives from companies such as TECNO, BenQ, Hisense, NXP Semiconductors, Haier, CP PLUS, and Lava International<\/strong> noted that the expansion of ISM 2.0 and ECMS provides the confidence needed for deeper localisation, R&D investment, and global competitiveness.<\/span><\/p>\n \u00a0<\/p>\n AI and cloud-focused companies including TrueReach AI, Covasant Technologies, Redacto.ai, Matters.AI, and Nxtra by Airtel<\/strong> highlighted the significance of tax holidays, compute infrastructure expansion, and AI mission funding in enabling India\u2019s transition from a services hub to an <\/span>\u201cintelligence-first\u201d economy.<\/span><\/p>\n \u00a0<\/p>\n Beyond manufacturing, the budget also connects technology growth with employability. Initiatives such as the <\/span>Education-to-Employment Standing Committee, Content Creator Labs in schools, and industry-linked university townships<\/strong> aim to align education outcomes with emerging industry needs\u2014especially in AI, semiconductors, and advanced manufacturing.<\/span><\/p>\n \u00a0<\/p>\n This integrated approach ensures that India\u2019s technology ambitions are supported by a future-ready workforce.<\/span><\/p>\n \u00a0<\/p>\n Union Budget 2026<\/strong><\/a> goes beyond incremental reforms and signals a <\/span>structural transformation<\/strong> in how India approaches technology, manufacturing, and digital infrastructure.<\/span><\/p>\n \u00a0<\/p>\n By combining long-term tax certainty, deep investments in semiconductors and electronics, cloud-friendly policies, and workforce alignment, the government has laid a strong foundation for India to emerge as a <\/span>trusted global hub for chips, cloud, and AI-driven innovation<\/strong>.<\/span><\/p>\n \u00a0<\/p>\n The real test now lies in execution\u2014but the intent, scale, and policy clarity suggest that India\u2019s technology growth story is entering a far more substantive and globally competitive phase.<\/span><\/p>\n \u00a0<\/p>\n Latest Technology News | Updates<\/a> | Latest Electric Vehicle News | Updates<\/a> | Electronics News<\/a> | Mobile News | Updates<\/a> | Software Updates<\/a><\/p>\n \n Facebook<\/a> | Twitter<\/a> | WhatsApp Channel<\/a> | Instagram<\/a> | Telegram<\/a> | Threads<\/a> | LinkedIn<\/a> | YouTube<\/a><\/p>\n \u00a0<\/p>\n Stay informed, Stay Connected!<\/p>\n The post Union Budget 2026 Announces Semiconductor Mission 2.0, Cloud Tax Holidays Till 2047, and a Major Push for AI & Electronics Manufacturing<\/a> appeared first on Before You Take<\/a>.<\/p>","protected":false},"excerpt":{"rendered":" \u00a0 The Union Budget 2026\u201327 marks a decisive shift in India\u2019s economic and technology strategy, positioning the country for long-term leadership in semiconductors, cloud computing, artificial intelligence, and advanced manufacturing. Presented at a time when global supply chains are being restructured and digital Continue reading Union Budget 2026 Announces Semiconductor Mission 2.0, Cloud Tax Holidays Till 2047, and a Major Push for AI & Electronics Manufacturing<\/span>Accelerating Energy Transition and Domestic Energy Security<\/h2>\n
India as a Global Cloud and Data Center Hub<\/h2>\n
Tax Holiday Until 2047 for Global Cloud Providers<\/h3>\n
Safe-Harbour Norms for Transfer Pricing Certainty<\/h3>\n
Ease of Living Through Customs Duty Rationalisation<\/h2>\n
India Semiconductor Mission 2.0: From Assembly to Full-Stack Capability<\/h2>\n
Three Strategic Pillars of ISM 2.0<\/h3>\n
Industry-Led R&D and Talent Development<\/h3>\n
Electronics Components Manufacturing Scheme Gets a Major Boost<\/h2>\n
Strong Industry Endorsement Across Sectors<\/h2>\n
Education, AI, and Workforce Readiness<\/h2>\n
Conclusion<\/h2>\n
Follow Before You Take<\/a> on:\u00a0<\/span><\/h3>\n