From GST Compliance To Focus On AI And Cybersecurity, Here’s What The Tech Industry Wants
India's technology sector, valued at $227 billion, is set to play a pivotal role in shaping the nation's future. With a remarkable annual growth rate of 15.5 per cent, the sector is poised for even greater expansion, but industry leaders are calling for strategic reforms in the Union Budget 2025 to ensure this momentum is sustained. Following a digital initiative allocation of Rs 16,549 crore in 2024, key stakeholders have outlined several crucial areas requiring attention to foster growth amid global market dynamics.
Boosting Research And Development (R&D)
One of the foremost concerns for the tech industry is India's relatively low investment in research and development, which currently stands at less than 1 per cent of GDP, significantly below the global average of 2.3 per cent. To bridge this gap, industry leaders are pushing for increased tax deductions for R&D activities, particularly in emerging fields like artificial intelligence (AI), quantum computing, and blockchain. Additionally, government grants to support research partnerships between academia and industry could foster global competitiveness. Simplifying patent filing processes and promoting intellectual property creation would further boost R&D efforts, positioning India as a hub for technological innovation.
Supporting Startups And Entrepreneurs
Startups are a crucial driver of India’s economic engine, but they often face challenges such as funding constraints and complex regulations. To support the growth of entrepreneurial ventures, tech leaders are urging for a simplified tax regime and extended tax holidays for startups, as seen in countries like Singapore and the United States. The government’s Fund of Funds for Startups (FFS) should also receive increased financial support to empower emerging businesses. Additionally, there is a call to incentivise innovation in Tier 2 and Tier 3 cities, unlocking untapped potential outside of major urban centers.
