The Union Budget 2026 has allocated ₹1,000 crore to the IndiaAI Mission, lower than the ₹2,000 crore provided in the previous year. Actual expenditure under the mission in the last financial year stood at around ₹800 crore, highlighting implementation delays in government-led AI programmes.
The allocation forms part of the broader five-year IndiaAI framework of ₹10,371.92 crore. However, a new ₹1 lakh crore private-sector research and development financing pool announced in the Budget includes a dedicated ₹20,000 crore for artificial intelligence research and deployment across enterprise, agriculture, healthcare and defence.
The AI funding under the private R&D pool will be routed through funds registered with the Securities and Exchange Board of India, and will operate through Alternative Investment Funds with leverage support. The structure is intended to support long-term research and development activities.
AI Deployment Across Public Infrastructure
Budget 2026 outlines multiple operational deployments of AI across public services and infrastructure.
In agriculture, the government will introduce Bharat-VISTAAR, a multilingual digital advisory platform that will integrate AgriStack datasets with agronomic practices developed by the Indian Council of Agricultural Research. The platform is designed to provide crop planning, pest management and market intelligence services directly to farmers.
The Budget also proposes the deployment of AI-based container scanning systems at major ports to enable faster cargo clearance while maintaining security screening standards.
In manufacturing and assistive technology, the Artificial Limbs Manufacturing Corporation of India will scale the production of customised assistive devices using AI-enabled design and fitting processes.
The allocation for the Ministry of Electronics and Information Technology has been increased to ₹21,633 crore, supporting digital infrastructure and national technology programmes linked to AI and electronics.
Talent Development and Workforce Alignment
To support skills development, the Budget announces the establishment of 15,000 AI laboratories in schools across the country. In addition, 10,000 technology fellowships will be introduced at leading higher-education institutions, including the Indian Institutes of Technology.
A high-level ‘Education to Employment and Enterprise’ Standing Committee will also be set up to examine the impact of emerging technologies, including AI, on employment, skills and workforce requirements.
Compute and Semiconductor Support
To strengthen domestic compute capacity, cloud service providers operating through Indian data centres will be offered tax holidays of up to 21 years. The Budget also provides ₹1,000 crore for India Semiconductor Mission 2.0 to support domestic semiconductor manufacturing.
Conclusion
Budget 2026 outlines a funding framework in which government allocations to the IndiaAI Mission continue, while a larger share of AI research and deployment funding is channelled through a newly created private-sector R&D pool. Alongside financing, the Budget places emphasis on operational AI deployments in agriculture, logistics and manufacturing, expansion of digital infrastructure, national-scale skills programmes and domestic compute and semiconductor capacity.
