India’s Budget 2025 is a step in the right direction, but execution will be critical

The author is an Investment Partner at Blume Ventures.

The 2025 Union Budget presents a fascinating study in policy evolution, marking a pivotal inflection point in India’s journey towards technological leadership. While the Finance Minister’s deep understanding of technology’s transformative potential is commendable, the real test, as always, lies in execution. The budget’s approach reflects a sophisticated grasp of how innovation ecosystems function — acknowledging that technological leadership requires more than just capital infusion.

The Vision: Beyond job creation. But is it realistic?

The budget’s recognition of startups as catalysts for technological sovereignty represents a sophisticated evolution in policy thinking. This strategic repositioning places innovation at the heart of national competitiveness — a stark departure from viewing startups merely as employment generators. However, this ambitious vision needs to be matched with ground-level operational excellence — something that has historically been our Achilles heel.

The three-pillar strategy: Ambitious but challenging

The budget architects this transformation through three interconnected pillars, each carrying both promise and potential pitfalls:

1. Next-Generation technology leadership
   The ₹600-crore boost to quantum computing missions signals the right intent but seems modest compared to China’s reported investments. While every journey begins with a first step, we need to ensure this doesn’t become another underfunded initiative. The focus on quantum technologies reflects an understanding of future battlegrounds in global technology leadership.
2. Talent ecosystem development
   Funding 10,000 PhD researchers is promising, but the question remains — can our institutional framework support high-quality research? The past has shown that mere numbers don’t automatically translate to innovation leadership. The success of this initiative will depend heavily on creating the right research environments and industry linkages.
3. Startup growth capital
   The streamlined AIF norms are a long-overdue correction. Yet, the success of the ₹20,000-crore deeptech fund will depend heavily on the government’s ability to build robust selection and disbursement mechanisms. The alignment of tax treatment for manager entities with global standards could potentially transform the venture capital landscape in India.

Electric mobility: A test case for implementation

The EV sector initiatives show sophisticated policy thinking. The duty reductions on lithium carbonate and cobalt could be game-changing, provided they are accompanied by consistent policy support and timely clearances. This isn’t just about cost reduction — it’s about positioning India as a competitive hub for advanced cell chemistry manufacturing.

The ₹12,000-crore push for electric buses demonstrates an understanding of how to create market demand that can anchor supply-chain investments. Yet, the success of such initiatives often hinges on coordination between central policies and state-level implementation — a historically challenging aspect of policy execution in India.

Research infrastructure: Building the foundation right?

The ₹25,000-crore research modernisation fund’s mandatory industry collaboration requirement is innovative. However, success will depend on creating meaningful engagement protocols — bureaucratic box-ticking exercises won’t drive real innovation. The focus on modernising research facilities could potentially transform how India approaches R&D, but it needs careful monitoring to ensure effective utilisation.

Policy integration: A possible strategic masterstroke

What makes this budget particularly interesting is how different elements reinforce each other. The patent process revolution, powered by AI, could significantly reduce time-to-market for innovations. Combined with research funding and talent development initiatives, this creates a potentially powerful innovation flywheel effect.

Looking forward: Cautious optimism

What we’re witnessing is undoubtedly a strategic reset in India’s approach to technology development. The finance minister deserves credit for crafting a comprehensive framework that positions startups at the heart of India’s technological sovereignty. The budget demonstrates an understanding that innovation leadership requires a delicate balance of multiple factors — talent, capital, infrastructure, and enabling policies.

Yet, as industry veterans, we’ve seen ambitious policies struggle at the implementation stage. The true test will lie in:

– Timely fund disbursement

– Minimal bureaucratic hurdles

– Consistent policy support

– Effective monitoring mechanisms

– Inter-departmental coordination

– State-level alignment

– Industry participation

The message is clear and inspiring — India’s future as a superpower will be built on technological excellence. But transforming this vision into reality will require sustained focus, efficient execution, and perhaps most importantly, patience. The budget sets the right direction, but success will depend on maintaining momentum through inevitable implementation challenges.

The path forward

For startup founders and innovation leaders, this budget presents both opportunities and responsibilities. While the policy framework is supportive, success will require active engagement with government initiatives and careful navigation of implementation challenges. The question isn’t whether India will become a technology superpower but whether we can maintain the momentum needed to get there.

Would you like to explore specific sectors where these initiatives might face unique implementation challenges? The devil, after all, is always in the details.

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