In the Union budget announcement for 2025-26 on Saturday, 1st February 2025, Finance Minister NirmalaSitharaman introduced several new schemes and initiatives aiming at the overall growth of India. As said by the finance minister, this budget is for “Viksit Bharat”. Apart from the relaxation in the income tax for middle-class people, the emphasis on the technology sector was also one of the key highlights of the Union budget. The technology-related updates vary from the expansion of broadband connectivity to government-aided schools to tax incentives for local manufacturing, AI in education, the Nuclear Energy Mission and many more. For the Department of Science and Technology, Rs 28508.90 crore has been allocated by the government in this union budget.
Key technology-related highlights from the Union Budget 2025-26
National Centres for Skilling
Five National Centres for Skilling will be established by the central government as said by NirmalaSitharaman during the union budget speech for 2025-2026. This initiative will be carried out with an emphasis on “global expertise and partnerships” to prepare the younger generation to obtain the necessary skills important for manufacturing and equip themselves with industry-ready skills.
AI Centre of Excellence
With an outlay of Rs 500 crore, Sitharaman also made the announcement of the establishmentof a new AI Centre of Excellence for Education by the central government. AI has become a most popular cutting-edge technology having applications in multifaceted industries. It has been identified that the application of AI powered tools in education has the potential to enable individuals to gain personalised learning, address gaps in skill building and accessibility across disciplines and make students be prepared for dealing in an AI-driven economy.
Earlier in the Union budget 2023-24, the announcement of establishing three Centres of Excellence in AI focused on agriculture, healthcare and sustainable cities was made by Sitharaman. Setting up a new AI Centre of Excellence reflects the vision of the government to develop an AI resilient workforce.
AI Centres for Viksit Bharat
On October 15th, 2024, the Ministry of Education, Government of India, will unveil 3 AI Centres of Excellence in Agriculture, Health and Sustainable Cities.
These CoEs are consortiums of top educational institutes with industries, startups, NGOs,… pic.twitter.com/D2S09iVGvX
— Ministry of Education (@EduMinOfIndia) October 13, 2024Atal Tinkering Labs (ALT)
The focus will also be given to the expansion of broadband connectivity to all primary health centres and secondary schools in India through the Bharat Net programme. The government will also intend to set up more than 50000 Atal Tinkering Labs (ALT) at government-aided schools in the coming five years. ALTs help to transfer creativity and curiosity by making them involved in practical, innovative projects and facilitating the development of essential skills such as computational thinking, design mindset, physical computing and adaptive learning. At present, there are around 10000 ALTs in India, which spans across 722 districts in 35 states and UTs.
Deep tech fund of funds
In order to promote the usage of cutting-edge innovations and fuel research and development, the government announced that it would emphasise exploring the establishment of a new deep tech fund of funds. Deep tech refers to an investment category that involves various advanced technologies, including AI, blockchain, robotics, photonics and electronics, advanced material science, quantum computing and biotech.
Basic customs duty on smartphone components
In the Union budget for 2025-26, the government also emphasised the expansion of the Make in India initiative to facilitate the growth of local manufacturing missions. This initiative will focus on the development of an ecosystem for the local manufacturing of components such as electronics, solar photovoltaic (PV) cells and grid-scale batteries. In order to boost the manufacturing of smartphones and accessories locally, customs duty for 28 capital goods and machinery utilised for the production of lithium-ion batteries in mobile phones has been found to be fully exempted by the government.
In addition, a reduction from 2.5 per cent to zero has also been noticed in the basic customs duty (BCD) on major smartphone components such as fingerprint sensors, camera modules, USB cables, PCBA and connectors. This initiative is most likely to enable further increased investments in the manufacturing ecosystem of smartphones in India.
Basic customs duty on television and EV components
Sitharaman also mentioned in the Union Budget that “In line with our ‘Make in India’ policy, and to rectify inverted duty structure, I propose to increase the BCD on Interactive Flat Panel Display (IFPD) from 10% to 20%”. The BCD has also been decreased to 5 per cent on Open Cells and other components. Open cells are used in the manufacturing of LED and LCD televisions.
Apart from 28 capital goods for the battery manufacturing of mobile phones, the exempted capital goods list also includes 35 additional capital goods for the domestic battery manufacturing of Electric Vehicles (EVs). Full exemption of BCD on the scrap of lithium-ion batteries, zinc, cobalt, lead, and 12 other critical minerals has also been proposed by the finance minister in the budget speech. This will help the EV makers to reduce the costs of EV production and improve the EV ecosystem without excessive dependency on imports.
Research Fellowship Program
In the Union Budget, Sitharaman also proposed providing 10000 fellowships in the next five years under the PM Research Fellowship scheme for supporting technological research in IISs (Indian Institute of Science) and IITs (Indian Institutes of Technology).
National Geospatial Mission
As per the budget speech of Sitharaman, for the development of foundational geospatial infrastructure and data, the government seeks to launch a National GeoSpatial Mission. She further added, “Using PM Gati Shakti, this Mission will facilitate the modernisation of land records, urban planning, and design of infrastructure projects”.
Nuclear Energy Mission
The Union Budget 2025-26 also underscores the importance of the shifting toward nuclear energy as a part of the long-term energy transition strategy of India. In this regard, the Nuclear Energy Mission has been established and an ambitious target of generating at least 100 GW of nuclear energy by 2047 has been set by the government. This initiative aligns with the priorities of Viksit Bharat, which will aim to reduce the over-reliance on fossil fuels.
For the achievement of this goal, the government is considering the integration of infrastructure investment efforts and strategic policy interventions, with a focus on indigenous nuclear technology and private-public sector partnerships. The Nuclear Energy Mission also emphasises the establishment of the research and development unit for Small Modular Reactors (SMRs). For this initiative, Rs 20000 crore has been allocated by the government. According to Sitharaman, “At least 5 indigenously developed SMRs will be operationalised by 2033”.
FAQ
What is the AI Centre of Excellence announced in the Union Budget 2025-26?
With an outlay of Rs 500 crore, Sitharaman also made the announcement of the establishmentof a new AI Centre of Excellence for Education by the central government. It has been identified that the application of AI powered tools in education has the potential to enable individuals to gain personalised learning, address gaps in skill building and accessibility across disciplines and make students be prepared for dealing in an AI-driven economy.
How will the government promote the local manufacturing of smartphones and EV components?
In order to boost the manufacturing of smartphones and accessories locally, customs duty for 28 capital goods and machinery utilised for the production of lithium-ion batteries in mobile phones has been found to be fully exempted by the government. Apart from 28 capital goods for the battery manufacturing of mobile phones, the exempted capital goods list also includes 35 additional capital goods for the domestic battery manufacturing of Electric Vehicles (EVs).
What is the Deep Tech Fund of Funds?
Deep tech refers to an investment category that involves various advanced technologies, including AI, blockchain, robotics, photonics and electronics, advanced material science, quantum computing and biotech.
How does the government plan to support technological research?
In the Union Budget,Sitharaman also proposed providing 10000 fellowships in the next five years under the PM Research Fellowship scheme for supporting technological research in IISs and IITs.
What is the Nuclear Energy Mission introduced in Union Budget 2025-26?
According to the Nuclear Energy Mission, an ambitious target of generating at least 100 GW of nuclear energy by 2047 has been set by the government.
