India's Budget 2025: Boosting AI, GCCs, and Tech Startups with New Initiatives

Deeptech Fund of Funds - A Game Changer for Talent Management in GCCs

This measure is essential, given that over 1,580 GCCs in India employ 1.66 million people. The Union Budget 2025-26 has introduced several initiatives specifically aimed at powering India's technology ecosystem and ensuring talent development. One of the standout measures is the Deeptech Fund of Funds (FoF), which, along with a ₹10,000 crore boost for startups, is set to transform Global Capability Centres (GCCs) by providing access to skilled professionals in fields like artificial intelligence (AI), cybersecurity, and cloud computing. This particular measure is essential, given that over 1,580 GCCs in India employ 1.66 million people, and the number is only increasing. However, many industry leaders and experts have stressed that finding the right talent has become a bigger challenge than building office spaces, and some GCCs are also suffering due to hiring challenges. Aparna Iyer, CFO at Wipro Limited, said, "With AI becoming an essential tool for a tech-powered economy, it is heartening to see the introduction of Centres of Excellence (CoE) for AI in education. To position India as a leader in the global AI race, it is imperative to prioritise investment in STEM (science, technology, engineering and mathematics) talent." Formulating a national framework to guide states in promoting GCCs is undoubtedly a step in the right direction. Suresh Ramamoorthy, country head of Lingaro India, stated, "The...national framework for GCCs...will provide a structured roadmap for one of the fastest-growing sectors in India." He added that with over 1,700 GCCs employing nearly 1.9 million professionals, the national framework for GCCs will help strengthen India's position as a hub for advanced technology solutions while also helping drive deeper collaboration between industry and academia. GCCs have already become an integral part of India's tech industry, with companies setting up innovation hubs to develop AI-driven solutions, automation systems, and next-generation software. However, hiring the right talent has been a major challenge, as pointed out by many industry leaders. The deeptech FoF is expected to address this by enhancing skill development programs and creating a strong talent pipeline. "With strategic investments in education, skilling, and inclusion, the Union Budget 2025-26 lays the foundation for a future-ready workforce and an inclusive growth story," said Dhriti Prasanna Mahanta, vice-president of TeamLease Degree Apprenticeship. He also emphasised that the 10,000 fellowships for tech research at IITs and IISc under the Prime Minister's Research Fellowship (PMRF) Scheme will help build a talent pool ready for deep-tech innovations. However, he also suggested that to maximise impact, the program must integrate industry internships similar to a Prime Minister's Internship Scheme (PMIS). "Engaging the top 20 Indian tech companies to co-create flexible, agile, and responsive training modules will further enhance the program's effectiveness," Mahanta added. By collaborating with global tech giants, these fellowships could also offer international internship opportunities and enhance exposure to real-world AI applications. The National Education Policy (NEP) 2020 has already introduced a credit-based system for future skill courses like AI and machine learning (ML). AI internships are now a core part of practical learning, where students gain hands-on experience with advanced AI tools and industry-led projects. According to Mahanta, these internships offer an average stipend of up to ₹35,000 and upon completion, interns can command salaries between ₹8-10 lakh per annum. This clearly indicates that specialised AI skills will be in high demand, making such programs crucial for GCCs looking to build AI-driven solutions. While Bengaluru and Hyderabad have traditionally been India's top GCC hubs, the government is now encouraging their expansion to tier-2 cities. With improved infrastructure and new talent pools, cities like Chandigarh and Indore are emerging as potential hubs. Vineet Dhawan, CEO of Digital Convergence Technologies (DCT), welcomed this development, stating, "We are excited to see how the national framework for promoting GCCs in emerging tier-2 cities will encourage talent availability, infrastructure improvement, and industry outreach." He also noted that the ₹20,000 crore allocated for private-sector research, development, and innovation will accelerate projects in AI, cloud computing, and cybersecurity, further fueling talent demand. The Union Budget 2025 underscores the government's proactive efforts to drive the expansion of GCCs in India, particularly in emerging tier-2 cities. Chandan Barve, VP and chief administrative officer of Sun Life Global Solutions, said that this initiative, with its strong focus on talent availability, infrastructure development, and regulatory reforms, will create new opportunities for both organisations and the country's employable youth. He further added that the commitment to a national framework for GCCs strengthens India's role as a "global hub fostering deeper innovation", which will deliver state-of-the-art technology services, and drive operational excellence. In addition, Garima Mitra, co-founder of Treelife, highlighted in her LinkedIn post that the five-year extension of the sunset clause in GIFT City for tax-neutral relocation of foreign funds reflects a strong positive sentiment about the government's intent to develop GIFT City. She added that tax clarity for alternative investment funds (AIFs) and the removal of tax collected at source (TCS) on securities will create a more streamlined investment ecosystem, reinforcing the government's commitment to fostering a more investor-friendly environment. By combining fellowships, AI internships, industry collaborations, and startup support, India is taking strong steps toward becoming a global leader in deeptech innovation. With government initiatives, industry partnerships, and startup growth, the future of talent management in India's GCCs looks promising.

Budget 2025 Focuses on GCC Framework, Startup 'Fund of Funds', CoE for AI

Union Finance Minister Nirmala Sitharaman with Union Minister of State for Finance Pankaj Chaudhary New and emerging technologies were in focus in the Union Budget, as Finance Minister Nirmala Sitharaman announced a national framework for Global Capability Centres (GCCs), Rs 500-crore Centre of Excellence in AI for education, and said a deep tech 'Fund of Funds' will be explored to catalyse the next generation startups. A new Fund of Funds, with expanded scope and a fresh contribution of additional Rs 10,000 crore is also on anvil. A national framework will be formulated as guidance to states for promoting Global Capability Centres in emerging Tier-2 cities. This will suggest measures for enhancing availability of talent and infrastructure, building byelaw reforms, and mechanisms for collaboration with industry. "I had announced three Centres of Excellence in Artificial Intelligence for agriculture, health, and sustainable cities in 2023. Now a Centre of Excellence in Artificial Intelligence for education will be set up with a total outlay of Rs 500 crore," Sitharaman said. Startups have a reason for cheer also as a new 'Fund of Funds' with expanded scope and a fresh contribution of additional Rs 10,000 crore will be set up. "The Alternate Investment Funds (AIFs) for startups have received commitments of more than Rs 91,000 crore. These are supported by the Fund of Funds set up with a government contribution of Rs 10,000 crore. Now, a new fund of funds, with expanded scope and a fresh contribution of another Rs 10,000 crore will be set up," she said. Gaja Capital Managing Partner Gopal Jain said the introduction of a new Fund of Funds for AIFs, and a Center of Excellence for AI in Education are all "promising steps" toward fostering a knowledge-driven economy. To improve access to capital, the credit guarantee cover will be enhanced for startups, from Rs 10 crore to 20 crore, with the guarantee fee being moderated to 1 per cent for loans in 27 focus sectors key for Atmanirbhar Bharat. Bruce Keith, Co-founder CEO, InvestorAi believes that the announcement on deep tech funds, while details are awaited, needs to be viewed through the 'DeepSeek' lens of what can be done with relatively small amounts of capital when provided to agile and creative teams. "We expect the venture capital ecosystem to bring velocity and momentum into funding these enterprises," Keith said. It is pertinent to mention here that the India GCC landscape has been progressing over the past five years and the total number of such centres have risen to over 1,700 in FY24 with over 2,975 centres. Jaspreet Singh, Partner and GCC Industry Leader, Grant Thornton Bharat said that the Budget's focus on expanding talent availability and infrastructure in Tier-2 cities marks a significant step in strengthening India's Global Capability Centre ecosystem. "By unlocking access to a wider talent pool, including professionals who prefer to stay in their hometowns, this initiative will enhance workforce stability and retention. Improved infrastructure will further enable seamless operations, making Tier-2 cities attractive destinations for high-value global work," Singh said. As GCCs evolve into strategic hubs for innovation and technology, the expansion will drive inclusive growth, reduce regional disparities, and position India as a global leader in digital and business services, Singh said and noted that a well-distributed GCC network will ensure long-term resilience, scalability, and global competitiveness. "The creation of the Deep Tech Fund of Funds will empower India's deep-tech entrepreneurship, and fuel India's global competitiveness in the AI race. With access to capital being a persistent challenge, the policy measures will increasing credit guarantee coverage for startups from Rs. 10 crore to Rs. 20 crore, enhancing access to capital," said Prabhu Ram, VP - Industry Research Group (IRG), CyberMedia Research. "India currently has the smallest talent demand-supply gap and is on track to achieve a skilled talent surplus by 2030. The expansion of IITs and the establishment of AI Centers of Excellence (CoEs) will strengthen India's talent pool in emerging technologies, particularly AI. The PM Research Fellowship Scheme will also support innovation by offering 10,000 fellowships over the next five years at prestigious institutions like IITs, NITs, and IISc," he added.

Budget 2025: Govt Pushes for GCCs in Tier-2 Cities, Unveils AI Centre of Excellence

The finance minister has announced a CoE in Artificial Intelligence for Education with a total outlay of INR 500 crore. The Union Budget 2025 indicates the government's shifting focus towards tier-2 cities for the expansion of global capability centres (GCCs), moving beyond traditional hubs like Bengaluru, Hyderabad, Delhi, Chennai, Mumbai, and Pune. Finance minister Nirmala Sitharaman has highlighted plans to boost talent, develop infrastructure, and introduce industry-friendly policies in tier-2 cities. To boost talent, the government has announced the establishment of a centre of excellence in AI for education and the awarding of 10,000 new fellowships to students at IITs and IISc over the next five years. Industry leaders had already anticipated this development. Alouk Kumar, founder and CEO of Inductus, said, "The success of GCCs in India to the tune of 70% depends upon the right kind of resources." He pointed out that finding skilled talent is now a bigger challenge than setting up office spaces, leading some GCCs to struggle with hiring difficulties. Kumar proposed expanding beyond traditional locations to leverage the talent available in tier-2 cities. Raghavendra Vaidya, MD and CEO of Daimler Truck Innovation Center India said, "We hope the government can streamline the process of running a GCC from a tax and infrastructure standpoint. Investing in infrastructure would be greatly beneficial." The Zinnov-Nasscom India GCC Landscape report shows a rise in tier-2 and tier-3 city GCCs, increasing from 5% in FY2019 to 7% in FY2024. These Nano GCCs are expected to grow by 15-20% by 2025, with 25-30% growth projected in the following years. According to AIM Research, cities like Chandigarh and Indore, each housing 4% of total GCCs, are becoming new hotspots for expansion. While Bengaluru and Hyderabad are still leading, many companies are exploring alternative locations to tap into skilled graduates from smaller cities. With tier-2 cities home to many engineering, IT, and business institutions, experts believe this shift will help GCCs find the right talent while spreading economic benefits across more regions. In a major push for education and skill development, the finance minister announced a CoE in Artificial Intelligence for Education with a total outlay of INR 500 crore. This initiative builds on the three AI centres set up in 2023 for agriculture, healthcare, and sustainable cities. Sitharaman also revealed plans for five National Centres of Excellence for Skilling, designed to equip the youth with industry-relevant expertise. "These centres will be set up with global partnerships to support Make for India and Make for the World manufacturing," Sitharaman stated. The initiative will cover curriculum design, trainer training, a skill certification framework, and regular assessments. To strengthen higher education, the government is investing in the expansion of IIT infrastructure. Over the past decade, student intake at IITs has doubled from 65,000 to 1.35 lakh. Additional facilities will be developed at five IITs established post-2014, creating space for 6,500 more students. Hostel and other infrastructure capacity at IIT Patna will also be expanded

Union Budget 2025: Important tech and startup announcements

Finance minister Nirmala Sitharaman put the spotlight on education, skilling and technological innovation with a special focus on artificial intelligence in education. A new Fund of Funds for Startups will be set up to enhance entrepreneurship with a contribution of additional Rs 10,000 crore to the existing government contribution of Rs 10,000 crore.A national framework to help states promote Global Capability Centres (GCCs) and enhance the availability of talent and infrastructure in tier II cities will further boost the fledgling GCC ecosystem in the country which has seen tremendous growth over the last few years. Estimates suggest that two new GCCs were set up every week last year. "Great to see government partnering with #GCCs to boost #Infrastructure development and #talent in #Tier2Cities. A national guidance framework will be provided to help states promote and accelerate GCC growth," industry body Nasscom said on X (formerly Twitter) following the announcement. With 80% of global firms yet to establish GCCs in India, this initiative unlocks tremendous potential for transforming India's attractiveness as the global GCC capital, while creating millions of skilled jobs across the country's emerging urban centres, said Lalit Ahuja, CEO, ANSR. Jaspreet Singh, partner and GCC industry leader, Grant Thornton Bharat said that as GCCs evolve into strategic hubs for innovation and technology, this expansion will drive inclusive growth, reduce regional disparities, and position India as a global leader in digital and business services. There was a significant push made for having a future ready workforce with focus on driving innovation and research through several initiatives. Finance minister Nirmala Sitharaman put the spotlight on education, skilling and technological innovation with a special focus on artificial intelligence in education. The government has announced the setting up of a Centre of Excellence (CoE) for AI in education with a Rs 500 crore outlay, Sitharaman said. She also promised global skilling partnerships to boost India's role in global manufacturing. Notably, a National Manufacturing Mission for small, medium and large industries to further Make In India was also announced. Sitharaman said infrastructure will be expanded in IITs set up after 2015, allowing for 6,500 more students across five IITs. Additionally, a deeptech Fund of Funds will be explored to support technological advancements, while 10,000 fellowships will be provided for tech research at IITs and IISc under the PM Research Fellowship Scheme, Sitharaman said. Also, a new Fund of Funds for Startups will be set up to power entrepreneurship with fresh contribution of another Rs 10,000 crore, in addition to existing government contribution of Rs 10,000 crore, the finance minister said. "The renewal of the Rs 10,000 crore commitment to the Fund of Funds for AIFs is a significant step forward for the Indian startup and investment ecosystem," Anirudh A. Damani, managing partner, Artha Venture Fund said in a statement. "The initial Rs 10,000 crore commitment catalyzed Rs 91,000 crore in investments, and I fully expect this fresh infusion to attract an additional Rs 1 lakh to Rs 1.5 lakh crore in capital." He said the initiatives will provide much-needed growth capital to early-stage startups, further strengthening India's position as a global innovation hub. The government's also announced a new scheme for 5 lakh women, scheduled castes & scheduled tribes first-time entrepreneurs was also announced.