Union Budget 2026: Historic allocation for AI likely, will India emerge as Global AI Hub?
Union Budget 2026: As the February 2026 budget session approaches, the entire tech world is watching the Finance Minister’s announcements with keen interest. Recent government announcements and policy signals clearly indicate that the upcoming Union Budget 2026-27 may include a historic allocation for Artificial Intelligence (AI). The government aims to transform India from merely an ‘AI consumer’ to a ‘Global AI Hub’.
The central government has already approved the India AI Mission with an outlay of Rs 10,371.92 crore. Experts believe that the second phase (2.0) of this mission may be announced in Budget 2026. The main objective of this mission is to provide computing power (GPUs) to startups and develop indigenous ‘foundational models’ (LMMs).
Govt to train 10 lakh youth in AI and robotics
AI training requires massive computing power. According to reports, the government may provide special incentives (tax holidays) for the deployment of over 38,000 GPUs and data center infrastructure. Recently, Union Minister Ashwini Vaishnaw indicated that the government is launching a mega skilling program to train 10 lakh youth in AI and robotics. A significant portion of the budget is likely to be allocated for this.
Emphasis on AI expansion in the agriculture and healthcare sectors
Furthermore, it is expected that the budget will announce special funds for developing AI solutions in priority sectors such as agriculture (crop prediction) and healthcare (AI-based diagnostics). India is set to host the ‘Global AI Impact Summit’ in February 2026. Strategic announcements regarding this global event and international cooperation may be made in the budget.
Engine of economic growth
According to an estimate, the adoption of AI could add $1.7 trillion to India’s GDP by 2035. The government is viewing it not just as a technology, but as an ‘engine’ of economic growth. In Budget 2026, the government’s focus will be on “Make AI in India” and “Make AI Work for India”. If the proposed policies and funds are directed effectively, India could soon emerge as the world’s ‘AI factory’.
Prakash Kumar Pandey