On a typical morning in urban India, digital systems quietly run the country. A student logs into an online class, a delivery driver follows a GPS route, and a pensioner checks her bank balance on a mobile app. None of this feels remarkable anymore and that is precisely the point. Digital platforms have evolved into an invisible infrastructure, as essential and as important as electricity and water.
But every layer of digital convenience rests on networks, data flows, and software systems that are inherently vulnerable. As India builds faster, it is also building more exposure. Cyber risk is no longer a remote or theoretical concern. It has become a practical risk embedded in daily economic life. And as digital dependence grows, the consequences of cyber failures grow with it.
The question facing India today is not whether cyber incidents will occur; they already do, but whether businesses, institutions, and households are equipped to absorb the shock when they do. This is where the Union Budget 2026 has a chance to shift the conversation, from reacting to cyber damage to preparing for cyber risk.
A Risk That Touches Everyone
Not long ago, cybersecurity was treated as the concern of large corporations and banks with sophisticated IT systems. Today, the exposure is far wider. A small retail business that depends on digital payments, a hospital storing patient records electronically, a logistics firm using cloud-based tracking, or a family relying on internet banking all are all now part of the cyber risk landscape.
A single incident can have cascading effects. A large number of people’s personal information may be misused by a data breach. A ransomware attack can halt hospital operations. Payment fraud can empty a household’s savings. A disruption in a digital supply chain can delay production, shipments, and deliveries across industries.
The impact goes beyond money. Cyber incidents damage reputations, interrupt operations, invite legal and regulatory action, and, importantly, destroy trust. Once users lose confidence in digital systems, adoption slows and the benefits of digitalisation begin to reverse.
Yet most organisations still approach cyber security as a technical function, not as a core business risk. Decisions are often reactive, triggered by an incident rather than embedded into a strategy.
Why Cyber Insurance Matters
Cyber insurance is often misinterpreted as merely a tool for compensation after a breach. In reality, its deeper value lies in how it changes behaviour before anything goes wrong.
Insurers cannot price cyber risk without understanding it. This means companies seeking coverage must evaluate vulnerabilities, improve controls, document systems, and plan responses. Over time, this pushes organisations toward better governance, clearer accountability, and stronger internal discipline.
Cyber insurance is a type of risk management structure for businesses and organisations. By providing a safety net for smaller-sized businesses after a cybersecurity event, cyber insurance can mean the difference between existing and closing up shop.
The Role Of Public Policy
Establishing government policy for cyber insurance development in India is essential to address the current issues of limited adoption of cyber insurance by businesses and cyber insurance being perceived as too costly or non-essential.
The Union Budget 2026 can be used to develop an overall cyber resilience strategy in India. First, there needs to be a recognition of the cyber risk as a systemic economic risk as much as a systemic economic risk and that digital safety is just as important as digital access.
Secondly, the Union Budget 2026 can provide tax incentives, partial subsidies and various methods for incentivising businesses to invest in creating cyber resilience for small and medium businesses, startups and critical services.
Third, by supporting the ecosystem through investments in cyber research, skills, data sharing, and public-private partnerships, which improve risk modelling, underwriting confidence, and product availability. These measures do not replace regulation; they reinforce it by making resilience practical rather than purely procedural.
Protecting Trust In The Digital Economy
Digital India operates because people have trust in the safety of their data, the security of their payments and the functioning of their systems. Trust can be destroyed easily, with greater social and economic ramifications than just the financial loss of each individual.
Cyber Insurance by itself does not prevent attacks. However, it will lessen the effect of the attack, allow quicker recovery and promote readiness. Cyber Insurance assures that cyber events will remain manageable events rather than systemic disruptions.
India has established a digital economy in a short time frame; the future will focus on the resiliency of the economy. Digital Protection must become a cornerstone of digital access – rather than a reaction to a crisis, it is essential for sustainable growth.
