Budget 2026 draws support from tech leaders, but concerns remain on market frictions

India’s Union Budget 2026 has been largely well-received by the technology sector, with leaders praising its emphasis on artificial intelligence, semiconductor development, digital infrastructure, and education. Investors believe focusing on AI talent will attract global capital and strengthen the domestic startup ecosystem, while the semiconductor initiatives are seen as crucial for long-term industrial depth and reduced import dependence. The budget also aims to deploy AI in sectors beyond technology, such as agriculture and legal services, and strengthen cybersecurity and digital sovereignty.

However, a significant point of contention is the substantial increase in Securities Transaction Tax (STT) on derivatives trading. Critics warn that this could reduce market liquidity, drive away investors, and ultimately harm retail participants despite the government’s intention to curb retail losses. Concerns center on potential collateral damage to market depth and overall functioning.

Overall, the budget is viewed as a long-term strategy for capability building rather than immediate stimulus. Its success hinges on effective execution and addressing the market frictions introduced by the STT increase to maintain investor confidence.

(Source：Startupnews)