Technology at the heart of India’s economic outlook: What the economic survey 2025–26 means for the technology industry

By Raja Lahiri, Partner and Technology Industry Leader, Grant Thornton Bharat

The Economic Survey 2025-26 highlights a decisive shift in India’s economic approach. Technology is no longer treated as a high-performing sector, but as a structural pillar of growth, resilience, and strategic autonomy. Instead of highlighting digitalisation and AI as isolated successes, the Survey integrates technology directly into India’s macroeconomic and global strategy.

At its core, the Survey makes a clear point that India’s next phase of growth must balance economic expansion, financial stability, and geopolitical strength. Technology is no longer seen just as a growth driver, but as a tool to build state capacity, strengthen industry, and improve long-term resilience. For the technology industry, this shift reshapes how companies invest, design their business models, and work with the government.

Technology as a Pillar of Macroeconomic Capacity
The Survey revises India’s potential growth rate upward to 7 per cent, attributing this to sustained reforms, public investment, and productivity-enhancing infrastructure. Technology plays a quiet but foundational role in this assessment. The state’s growing reliance on real-time data, high-frequency indicators, and nowcasting models reflects a deeper integration of digital systems into macroeconomic management itself.

For technology firms, this signals a structural expansion of demand – not only from private enterprises, but from the state as it modernises governance, fiscal monitoring, and policy execution. Cloud infrastructure, data engineering, analytics platforms, and AI-driven decision systems are no longer optional upgrades; they are becoming integral to how the Indian economy is steered.

For the technology industry, the Economic Survey redefines data sovereignty as a growth framework rather than a constraint. By tying large-scale use of Indian data to reinvestment in domestic AI capabilities, it signals a shift from ‘India as a data source’ to ‘India as a value-retaining technology hub,’ reshaping how global and domestic tech firms structure their India operations.

Capital Discipline and the Economics of Technology Investment
The Survey advances a clear and sobering argument: India’s high cost of capital is not merely cyclical or policy-driven, but a structural outcome of persistent current account pressures. This has direct consequences for capital-intensive segments of the technology industry – data centres, AI compute infrastructure, semiconductors, and deep-tech ventures.

The next phase of India’s technology growth will be determined as much by physical infrastructure as by software talent. As AI, cloud-native platforms, and data-intensive services become core to global tech value chains, data centres emerge as strategic assets for the technology industry. Despite generating nearly one-fifth of the world’s data, India hosts only a small fraction of global data centre capacity, forcing domestic tech firms to rely on offshore infrastructure and limiting their ability to build, train, and deploy AI at scale. If energy availability, sustainability, and policy certainty are not addressed, this infrastructure gap risks locking India’s tech industry into lower-value service roles. Bridging this gap is therefore essential for India to translate its AI potential into durable technological and export competitiveness.

Rebalancing Technology’s Role in the External Sector
The Survey recognises that IT and IT-enabled services have been indispensable in stabilising India’s external accounts, with services exports consistently outpacing merchandise exports. Yet it introduces a crucial nuance: services-led growth, while valuable, does not exert the same disciplining pressure on state capacity as manufacturing-led exports.

Technology services firms can scale without deep integration into domestic supply chains, logistics networks, or industrial ecosystems. As a result, policy expectations are evolving. The message for the technology industry is not retrenchment, but transition towards deeper integration with manufacturing, logistics, and global value chains where digital capabilities reinforce real-sector competitiveness.

Technology as the Backbone of Industrial Transformation
The Survey positions technology as central to India’s next phase of industrial growth. Manufacturing ambitions are shown to depend on innovation, skilling, logistics efficiency, MSME scaling, and digital integration.
This creates structural demand for industrial IoT, smart factory solutions, digital twins, supply-chain platforms, and MSME-focused software that lowers compliance costs and improves market access.

Digital Infrastructure as Core Capital
Digital infrastructure is now recognised as core economic infrastructure. Data centres, cloud platforms, digital public infrastructure, and innovation-enabling layers are prioritised alongside roads, ports, and power – formally anchoring technology at the centre of India’s investment strategy.

AI: From Frontier Race to Developmental Tool
AI is framed as a development-driven technology, with emphasis on responsible deployment. By prioritising applied AI in public services, manufacturing, agriculture, and healthcare, the Survey opens clear opportunities for technology firms while highlighting the need for robust governance, institutional readiness, and deep talent pools to sustain adoption at scale.

Taken together, the Economic Survey 2025–26 redraws the social contract between the Indian state and the technology industry. Technology is no longer valued solely for exports, efficiency gains, or valuation metrics. It is assessed by its contribution to productivity, resilience, institutional capacity, and strategic autonomy. We look forward to the budget which captures all these priorities