As India navigates its journey to become a Global AI leader, Budget 2026 should focus on promoting safe, secure, and home-grown AI innovation, particularly in the financial sector where trust and data security are essential. Government projections indicate that AI may contribute as much as $1.7 trillion to India’s economy by 2035, with banking and financial services being some of the primary sectors reaping the rewards of its integration. Although approximately 87% of Indian businesses utilize AI in various capacities, merely 26% have reached maturity at scale, underscoring a disparity between adoption and innovation. AI plays a crucial role in India’s digital financial system, aiding in real-time fraud detection, risk assessment, and providing conversational support; however, most foundational models and platforms are externally sourced rather than focused on India.

The 2026 budget must clearly promote the creation of native AI models and establish computing infrastructure that complies with local language, regulatory, and security standards. Increased financial support for programs like the IndiaAI Mission and specific incentives for AI research and development in India, such as tax credits and grants for foundational model training, will enhance innovation. Moreover, the increase in digital banking fraud and cyber risks renders AI governance and ethical safeguards crucial. We suggest improved backing for AI governance frameworks tailored to specific industries and privacy-focused data management systems that protect customer information while promoting responsible advancement. By maintaining a balanced budget that emphasizes indigenous capabilities, infrastructure, and regulation, India can transition from being an AI adopter to a creator, enhancing our financial ecosystem with secure and globally competitive AI solutions.

Vishal Maru, Global Processing Head, Financial Software and Systems (FSS)