Key Highlights
- Focus on internet expansion, Atal Tinkering Labs, and AI in education
- Deep-Tech Fund, National Manufacturing Mission, and tax cuts for electronics
- PLI expansion, revised import duties, and UPI-linked credit card for businesses
New and developing technologies are given a lot of attention in the Union Budget 2025–2026. It seeks to strengthen India’s domestic innovation and manufacturing sector. Finance Minister Nirmala Sitharaman introduced various initiatives. This includes a deep-tech ‘Fund of Funds,’ policies for broadband connectivity in schools, and incentives for electronics production. Let’s take a closer look at the key highlights.
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Boost For AI And Education
- To improve digital learning, the government has put aside Rs. 500 crore to establish a Center of Excellence for AI in Education.
- Plans to establish 50,000 Atal Tinkering Labs (ATLs) in government schools over the next five years to encourage innovation among students.
- Broadband expansion through the Bharat Net initiative will provide connectivity to schools and healthcare centers across the country.
Strengthening India’s Manufacturing Sector
- A new Deep-Tech ‘Fund of Funds’ will be introduced to support startups and research in advanced technologies.
- The National Manufacturing Mission will provide a structured framework to promote domestic production and reduce reliance on imports.
- The budget includes funding for IITs established after 2014, increasing student capacity by 6,500 seats.
Electronics And Consumer Goods Industry
- The Make in India initiative will now cover the production of grid-scale batteries, solar PV cells, and electrolysers to boost clean energy.
- Import duties on open cells and Ethernet switches have been reduced, helping domestic manufacturers lower production costs.
- Tariff on flat-panel displays increased from 10 percent to 20 percent, potentially leading to higher prices for larger-screen televisions.
- Tax breaks on essential components for smartphones and Smart LED TVs would lower the cost of these devices for Indian consumers.
MSMEs And Financial Support
- With increased investment and turnover limits for classification, MSMEs remain a priority making it easier for them to access funding.
- Basic Customs Duty (BCD) revisions on raw materials will strengthen India’s supply chain for mobile accessories and other electronics.
- Expansion of hardware industry PLI (Production Linked Incentive) programs to improve production capacity.
- A Rs. 30,000 limit UPI-linked credit card was developed to encourage small company transactions and digital payments.
Industry Reactions
Arijeet Talapatra, CEO at itel and Tecno: The Union Budget 2025 signals a strategic move to position India as a global hub for mobile manufacturing. The proposed tariff reductions on essential assembly components—such as PCBAs, camera modules, USB cables, and display modules—are a welcome measure that will improve cost efficiencies, accelerate localization, and strengthen the Make in India initiative.
Saket Gaurav, Chairman & MD, Elista: The upcoming budget presents a significant opportunity for the government to support the Indian consumer durables industry. Expanding the PLI scheme and reducing import duties on critical components will significantly strengthen domestic production capabilities. Rationalizing GST rates, especially on larger screen televisions currently taxed at 28 percent, would enhance affordability and encourage the adoption of advanced technology, aligning with the ‘Digital India’ vision.
Imran Kagalwala, Co-Founder at UNIX India: The Union Budget 2025 sends a strong message about the central role of MSMEs in driving India’s electronics manufacturing sector. By prioritizing MSME growth, the government is laying the foundation for a more resilient domestic production ecosystem. While the anticipated anti-dumping duty on final products like mobile accessories was not introduced, revisions in Basic Customs Duty (BCD) on raw materials are expected to strengthen the domestic supply chain and reduce import dependency.
Ashok Rajpal, Managing Director, Ambrane India: The government’s reduction in import duties on key components in the electronics sector, coupled with the attractive PLI scheme for the hardware industry, will significantly strengthen production capabilities in India in the short run. Additionally, with the planned roadmap focusing on long-term growth, including substantial investments in semiconductor manufacturing and the launch of the National Manufacturing Mission, we are optimistic about the future of the manufacturing sector in India.
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Ritesh Goenka, Managing Director of Damson Technologies: Finance Minister Nirmala Sitharaman’s announcement of the National Manufacturing Mission in the 2025 Union Budget is a commendable step towards strengthening India’s manufacturing sector. By providing policy support and a structured framework, this mission is poised to enhance domestic production and self-reliance, aligning seamlessly with our objectives at Damson Technologies.
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