Edtech was once a pandemic-era convenience fuelled by startup disruptions, but is increasingly being framed as national infrastructure critical to employability and India’s long-term competitiveness in a digital-first global economy.
Over the past year, the government has signalled this shift through sustained investments in education and skilling. The Union Budget 2025 allocated ₹1.28 lakh crore to the Ministry of Education, backing initiatives including establishing a Centre of Excellence in AI for education and Atal Tinkering Labs, as well as expanding skilling programmes and digital learning platforms. The emphasis on AI, blended learning, and technology-enabled education marked a decisive move towards aligning learning outcomes with future labour market needs.
“Last year’s Budget reflected a clear, forward-looking approach to education, with a strong emphasis on AI-led learning,” notes Anil Kapasi, managing director and co-founder of Arihant Academy.
Yet, as the edtech sector enters 2026, the focus has moved beyond intent. Industry leaders are now seeking measures to make edtech more affordable, particularly as AI skilling and digital technologies become central to employability across sectors.
“AI and digital are no longer peripheral skills; they are the core gateway to jobs and competitiveness,” Pankaj Jathar, CEO of NIIT Limited, tells AIM. “As digital learning continues to play a central role in India’s skilling journey, improving affordability will be key to unlocking its full potential.”
One of the sharpest pain points is taxation. While digital education has expanded rapidly, especially in professional and skilling segments, most online courses currently attract an 18% GST. According to edtech providers, this significantly affects price accessibility at scale, particularly for early-career learners, gig workers, and those in tier-2, 3 markets.
“Rationalising GST on verified digital learning programmes to a 5% bracket would make high-quality AI-enabled education more affordable, accelerate widespread adoption, and empower training providers and startups to scale sustainably,” Jathar adds.
Echoing calls for tax relief, Bhavesh Goswami, CEO and founder of IT training and consulting firm CloudThat, asserted that reducing GST on skilling programmes to zero, or at least to the 5% slab, is essential for India to become a global skills capital, especially in areas such as AI.
The call reflects a broader recalibration within the edtech ecosystem. After years of aggressive expansion, the sector is now contending with a renewed focus on profitability and outcomes.
At the same time, industry stakeholders urge the government to step up public investment in education and skilling. While India has made progress in identifying skill gaps, particularly in emerging technologies, through initiatives like the Skill India Mission, translating it into workforce readiness requires sustained fiscal commitment.
Ambrish Sinha, CEO of UNext Learning, said Budget 2026 presents an opportunity to move India’s education narrative “from accessibility to impact,” with stronger industry–academia collaboration. He added that after last year’s ₹500-crore allocation for a Centre of Excellence in AI for Education, the focus must now shift decisively towards execution, particularly across tier-2 and tier-3 cities.
Meanwhile, Jathar urges the government to set a clear target of 6% of GDP for education. “This must be delivered through higher absolute allocations that prioritise digital infrastructure, public–private skilling partnerships, and hard-to-reach geographies.”
This demand echoes long-standing recommendations from policy bodies and education commissions, and they have gained renewed urgency amid rapid AI adoption. From IT services and manufacturing to healthcare and finance, employers are increasingly seeking digitally fluent talent, not just specialists, but a workforce with baseline AI literacy.
The expectation from Union Budget 2026 is two-pronged: deepen public investment while creating conditions that allow private and hybrid education players to scale responsibly.
That hybrid model has already become central to how learning is delivered on the ground. Institutions such as Arihant Academy, which combine physical classrooms with digital tools, argue that the future of education in India lies in integration rather than replacement.
Co-founder Kapasi highlights the growing need for skill-based education, digital literacy, and teacher empowerment, using technology as an enabler and not a substitute for institutional capacity. Teacher training, curriculum alignment, and infrastructure gaps continue to determine how effectively edtech interventions translate into outcomes.
Schemes such as Samagra Shiksha, PM-POSHAN (formerly Mid-Day Meal Scheme), and PM SHRI for modernising schools are expected to continue, but industry leaders argue that tighter integration between these programmes and digital learning initiatives is essential. Without connected data systems, trained educators, and reliable infrastructure, AI-led education risks being unevenly distributed.
Inclusivity remains a key concern. While urban learners have benefited disproportionately from online and blended learning, rural and underserved regions still face barriers ranging from connectivity and device access to language and content relevance. According to NSSO data, only 24% of rural Indian households have internet access.
Budgetary support for vernacular content, low-cost devices, and community-level digital infrastructure is likely to be closely watched.
Beyond schools and colleges, skilling platforms see an opportunity to support lifelong learning, particularly as career paths become less linear. Vivek Iyer, managing director of D2L India, said Budget 2026 offers an opportunity to build a digital-first education architecture, where integrated platforms allow learners to track progress, personalise content, and stack credentials as they navigate non-linear career paths.
Fiscal incentives for reskilling and upskilling, especially in AI and emerging technologies, could help workers adapt to automation and shifting job roles.
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