The Union Budget 2025 has placed a strong emphasis on emerging technologies, artificial intelligence (AI), and startup growth, with key announcements including a national framework for Global Capability Centres (GCCs), a Rs 500-crore Centre of Excellence in AI for education, and the establishment of a Deep Tech ‘Fund of Funds’ to drive next-generation startups.
Key Announcements
1. National Framework for Global Capability Centres (GCCs)
A national framework will be developed to help states promote GCCs in Tier-2 cities by enhancing talent availability, infrastructure, byelaw reforms, and industry collaboration mechanisms. This move aims to strengthen India’s growing GCC ecosystem, which has expanded to over 1,700 centres in FY24, with nearly 3,000 centres in total.
“Expanding talent availability and infrastructure in Tier-2 cities is a significant step towards strengthening India’s GCC ecosystem, improving workforce retention, and making these cities attractive for global business operations,” said Jaspreet Singh, Partner and GCC Industry Leader at Grant Thornton Bharat.
2. Rs 500-Crore Centre of Excellence in AI for Education
Building on last year’s establishment of AI Centres of Excellence in agriculture, health, and sustainable cities, Finance Minister Nirmala Sitharaman announced a new Centre of Excellence in AI for education with a total outlay of Rs 500 crore.
3. Deep Tech ‘Fund of Funds’ & Expansion of Startup Financing
A new Deep Tech ‘Fund of Funds’ will be explored to catalyze the growth of next-generation technology startups. In addition, a new Fund of Funds with an additional Rs 10,000 crore contribution will be set up, expanding the government’s startup funding initiative.
- Alternate Investment Funds (AIFs) for startups have already secured commitments of over Rs 91,000 crore, supported by the existing Fund of Funds with Rs 10,000 crore government contribution.
- The credit guarantee cover for startups will be increased from Rs 10 crore to Rs 20 crore, with the guarantee fee reduced to 1% for loans in 27 focus sectors crucial for Atmanirbhar Bharat.
“The introduction of a new Fund of Funds for AIFs and the AI Centre of Excellence for education are promising steps toward a knowledge-driven economy,” said Gaja Capital Managing Partner Gopal Jain.
Bruce Keith, Co-founder & CEO of InvestorAi, emphasized that deep tech investments should be viewed through the ‘DeepSeek’ lens, where small but well-placed capital investments in agile and creative teams can drive innovation.
Impact of These Measures
- Strengthening India’s GCC ecosystem: The framework for GCCs in Tier-2 cities will boost employment, improve infrastructure, and position India as a global leader in digital and business services.
- Accelerating AI innovation in education: The new Centre of Excellence will help integrate cutting-edge AI solutions into the education sector, enhancing learning outcomes.
- Expanding financial support for startups: The Deep Tech Fund of Funds and increased credit guarantees will enable greater investment in high-potential startups, fostering entrepreneurship and technological advancements.
With these initiatives, the 2025 Union Budget reaffirms the government’s commitment to digital transformation, innovation, and startup ecosystem growth, ensuring India remains at the forefront of global technological advancements.
