Tech Industry’s Budget 2025 Wishlist: Focus on Deeptech Fund and Startup Benefits
As the Union Budget 2025-26 approaches, India’s leading IT industry body NASSCOM has presented a comprehensive wishlist focusing on strengthening the country’s tech ecosystem, with potential significant implications for Tamil Nadu’s burgeoning startup landscape.
Finance Minister Nirmala Sitharaman is scheduled to present the budget on February 1, 2025, amidst global economic uncertainties and evolving US trade policies that could impact India’s $250 billion IT export industry.
In a move that could particularly benefit Tamil Nadu’s growing deeptech sector, NASSCOM has proposed the creation of a dedicated central deeptech fund. This initiative aims to support innovative startups working in cutting-edge technologies, an area where Tamil Nadu has shown significant growth with its emerging AI, robotics, and biotechnology ventures.
“The creation of a central deeptech fund could be a game-changer for Tamil Nadu’s tech ecosystem,” says Rajesh Kumar, President of the Tamil Nadu Startup and Innovation Council (TANSIC). “With our strong engineering talent pool and established IT corridor, such funding could accelerate our state’s position in advanced technology development.”
The budget recommendations include crucial modifications to safe harbor rules, which protect businesses from certain tax implications, and proposals to expand the scope of Special Economic Zone (SEZ) reinvestment reserves. These changes could significantly impact Tamil Nadu’s IT corridor, home to numerous SEZ operations.
A key focus of NASSCOM’s proposals is the extension of Employee Stock Option Plan (ESOP) tax deferment benefits to employees of all DPIIT-recognized startups. This could prove particularly beneficial for Tamil Nadu, which hosts over 4,000 DPIIT-recognized startups, making it one of India’s leading startup hubs.
For Tamil Nadu’s tech sector, these proposals come at a crucial time. The state has witnessed a 40% year-over-year growth in startup registrations, with deeptech startups accounting for approximately 25% of new registrations in the past year. The proposed reforms could further accelerate this growth trajectory.
The budget expectations also address the challenges faced by the IT industry in light of global economic headwinds and potential policy shifts in the US market, which accounts for over 60% of Indian IT exports. Tamil Nadu, being a major IT services hub, could particularly benefit from any protective measures included in the budget.
“These budget proposals reflect the evolving needs of India’s tech industry,” notes Dr. Sundar Raman, Director of the Chennai Innovation Hub. “For Tamil Nadu, which has been focusing on developing high-value tech capabilities, these measures could provide the necessary impetus for our next phase of growth.”
The industry awaits the budget presentation with optimism, as these proposals could significantly influence the future of technology innovation and startup growth in Tamil Nadu and across India.
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