Boosting India's Electronics and AI Ambitions: Expanded Budget Paves the Path

Government Amplifies Budget to Nurture Electronics and AI Innovations

The Ministry of Electronics and Information Technology (MeitY) in India is set to undergo a transformative phase, propelled by a substantial 48% increase in its budget allocation, amounting to over Rs 26,000 crore. This strategic financial boost aims to invigorate the IndiaAI Mission and extend production-linked incentive (PLI) schemes, focusing keenly on the semiconductor industry, large-scale electronics, and IT hardware.

Amplifying Infrastructure for a Digital Future

Significant portions of the funding are earmarked for revolutionizing infrastructure and bolstering computational power. A notable increase in budget estimates can be seen in initiatives like the "modified scheme for setting up of semiconductor fabs in India," which jumps from Rs 1,200 crore in the FY25 revised estimate to Rs 2,499.9 crore planned for FY26.

The IndiaAI Mission receives a standout allocation of Rs 2,000 crore for FY25, soaring from a mere Rs 173 crore in the prior year's allotment. Such developments underscore the government's renewed focus on establishing a robust technological framework.

Investment in Compute Capacity

The government had sanctioned Rs 10,371.9 crore for the IndiaAI Mission, dedicating 44% of this to develop compute capabilities exceeding 10,000 graphics processing units (GPUs) across five years. This foresight aims to fortify India’s position in global AI advancements.

Focus on Semiconductor Developments

Emphasizing semiconductor advancements, the Centre plans to enhance the funding for the Mohali-based Semiconductor Laboratory, an autonomous entity under MeitY. The allocation for this facility leaps from Rs 11 crore (revised estimate for FY25) to Rs 400 crore (budget estimate for FY26).

The Centre for Development of Advanced Computing (C-DAC), a pivotal R&D institution, sees a modest budget increase for FY26, highlighting a continuous commitment to innovation in electronics and advanced IT products.

Initiating Data Protection Measures

Further investments include Rs 5 crore for establishing a Data Protection Board in FY26, as part of the Digital Personal Data Protection Act 2023. This marks an advancement from a previous allocation of Rs 2 crore.

Concerns and Future Considerations

Despite these enhancements, industry experts like Ashok Chandak, president of the India Electronics and Semiconductor Association, raise concerns about the lack of clarity on the India Semiconductor Mission 2.0. The absence of new PLI schemes for specific components or growth initiatives could potentially decelerate value addition within India's electronics ecosystem.