The Union Budget 2026-27, presented by Finance Minister Nirmala Sitharaman, emphasizes sustained economic momentum through robust infrastructure investment, strategic sectoral reforms, and a forward-looking approach to self-reliance and resilience. With a record capital expenditure (capex) outlay of ₹12.2 lakh crore (3.1% of GDP), the Budget prioritizes manufacturing, technology, defense modernization, digital infrastructure, and skilling to drive India’s journey toward Viksit Bharat.
Key highlights include a fiscal deficit target of 4.3% of GDP, continued focus on domestic manufacturing in frontier sectors like semiconductors and electronics, and targeted support for emerging areas such as the creative economy (Orange Economy), AI infrastructure, and risk management in high-growth industries.
Boost for Insurance and Reinsurance Sector
The Budget’s massive infrastructure push and emphasis on economic expansion create significant opportunities for the insurance and reinsurance industry. Gautam Boda, Vice Chairman of the J.B. Boda Group, highlighted the positive implications:
“Budget 2026 has finally brought the bigger picture into focus. With one of the highlights being the record ₹12.2 lakh crore capex outlay, it offers a constructive and forward-looking outlook for both the insurance and reinsurance sectors. Growth is most meaningful when it reaches the underserved. The Budget focuses on City Economic Regions (CERs), with an allocation of ₹5,000 crore per region, alongside the new ₹25,000 crore Infrastructure Risk Guarantee Fund. This sustained emphasis on infrastructure development, economic expansion, and financial inclusion strengthens the foundation for long-term risk protection and capital support, creating a massive opportunity for our industry. To move closer to “Insurance for All by 2047,” India is strengthening its capital framework. Today’s push towards Risk-Based Capital (RBC) norms and the operationalising of 100% FDI are critical steps to encourage domestic risk capital and solvency strength. As India’s risk profile grows in scale and complexity, a robust insurance framework backed by strong reinsurance capacity will be critical to ensuring stability, resilience, and confidence across industries. All in all, this Budget creates the right environment for deeper market penetration, innovative risk solutions, and greater global participation, positioning insurance and reinsurance as key enablers of India’s growth and resilience agenda.”
Defense and Technology Modernization
Defense receives one of the largest allocations, with the Ministry of Defence budget rising to approximately ₹7.85 lakh crore (a 15%+ increase), including capital outlay surging to ₹2.19 lakh crore (up nearly 22%). This supports indigenous capabilities in UAVs, electronic warfare, and advanced platforms.
Ankit Mehta, CEO of ideaForge Technology Pvt. Ltd., welcomed the measures:
“We congratulate the Finance Minister for presenting a pragmatic Budget that continues to prioritise Defence capital outlay while strengthening India’s domestic manufacturing ecosystem, electronics base, and semiconductor capabilities. Proposed measures such as the India Semiconductor Mission 2.0, the expanded Electronics Components Manufacturing Scheme, and support for advanced technology R&D signal a strong focus on building strategic supply chains and indigenous high-tech capability. With Defence capital expenditure in FY27 rising to ₹2.19 Lakh Crore, almost 22% higher than last year, the government has signalled a strong commitment to modernisation and long-term capability building. This provides clear guidance for frontier technologies and positions ideaForge to continue leading in indigenous UAVs, electronic warfare systems, and advanced aerial platforms, while contributing to India’s vision of a Viksit Bharat and a forward-moving Bharat.”
Digital Infrastructure and Cybersecurity Concerns
The Budget advances India’s digital ambitions with incentives for data centers, IT services, and emerging technologies, alongside reforms for reliable power sources like small modular reactors (SMRs) for data centers.
Tarun Dua, Cofounder & Managing Director, E2E Networks Limited, noted the implications for cloud and AI infrastructure:
“The Union Budget 2026 enhances the availability of global capital for CloudGPU infrastructure in India through targeted tax incentives. In this context, E2E Networks’ investments remain relatively small when compared with the scale of global capital currently being deployed in this sector. The simplification of the regulatory framework governing nuclear-powered SMRs/BSRs and other non-grid-connected, reliable power sources for data center parks addresses the sector’s large and growing energy requirements at highly competitive costs. This ongoing policy intervention is expected to ease medium-term grid pressure from data centers, reduce reliance on on-premise fossil-fuel-based generators, and enable more efficient deployment of battery energy storage systems. AI infrastructure customers increasingly prefer technology partners with demonstrated execution capability and meaningful capital commitment, as evidenced by E2E Networks’ own investments in CloudGPU infrastructure. Market demand extends beyond standalone CloudGPU capacity to encompass multiple layers of AI infrastructure technology tailored to diverse industry use cases. As a key participant in this evolving ecosystem, E2E Networks is well positioned to serve as a long-term partner of choice for global cloud service providers while continuing to scale its direct customer base in India and internationally. The partner ecosystem in India with comparable capabilities remains limited, creating a significant advantage for E2E as it establishes itself as a core player in the AI infrastructure landscape. It is also noteworthy that the global CloudGPU ecosystem is significantly larger, comprising an estimated 50–100 times the number of CloudGPU players. As a global-local partner of choice for a multitude of providers, E2E Networks benefits as a provider of Sovereign AI solutions. The combined impact of budget incentives and SHANTI reforms sends a clear signal to global CloudGPU infrastructure consumers that India is committed to cost-competitive CloudGPU deployment, scalable clean nuclear energy, and advanced AI infrastructure software and services. The resulting global partnership opportunities and strengthened ecosystem confidence directly support E2E Networks’ Sovereign AI growth strategy.”
Ashish Tandon, Founder & CEO (from Talking Point Communications), added a note of caution on cybersecurity:
“The Union Budget 2026–27 sends a positive signal on India’s digital ambitions through measures supporting data centres, IT services and emerging technologies. These steps strengthen the foundations for scale, efficiency and global competitiveness. However, as digital adoption deepens across cloud native applications, APIs and AI enabled workflows, cybersecurity remains an implied dependency rather than a direct policy focus. With application layer and data centric attacks rising sharply, targeted incentives for cybersecurity investments and clearer support for enterprise cyber resilience would have helped bridge the gap between digital growth and digital trust. Making security an explicit part of India’s digital infrastructure agenda is now the next critical step.”
Push for Skilling in Creative Economy
The Budget recognizes the Orange Economy, particularly the AVGC (Animation, Visual Effects, Gaming, Comics) sector, with initiatives like AVGC content creator labs in vocational institutes and alignment with Skill India.
Sandip Weling, Whole-time Director and Chief Business Officer – Global Retail, Aptech Limited, stated:
“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.”
Overall, the Budget 2026-27 balances fiscal prudence with aggressive investments in infrastructure, technology, and human capital, positioning India for resilient, inclusive growth amid global uncertainties. Industry leaders view it as a catalyst for deeper penetration in high-potential sectors while calling for continued focus on risk management and security.
