Finance minister Nirmala Sitharaman in her Budget 2026 speech proposed that foreign cloud service provider companies will be given a tax holiday till 2047. She noted the services to Indian customers must be provided through an Indian reseller entity. Reseller entities are Indian-incorporated companies that deliver cloud, AI, or digital infrastructure services to global customers from infrastructure located in India. Sitharaman also proposed a 15% safe harbour on costs for companies providing data centre services from India through related entities. These announcements are expected to enable critical infrastructure and boost investment in data centres, a booming sector in India. The sector’s growth is being driven by a combination of factors like the increased demand for digital services, a government mandate for data sovereignty, and the rapidly evolving artificial intelligence domain. Industry experts forecast that the total installed power of India’s data centres will surpass 2GW by 2026 from a current level of over 1GW. Industry analysts peg India’s data center capacity to grow fivefold by 2030 to over 8GW. India’s Global Cloud Backbone Bet The new announcement is expected to move India up the value chain from consuming global cloud services to exporting trusted digital infrastructure. The long-term impact is… Read MoreInc42 Media
