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The incentive aims to strengthen India’s data infrastructure and support the country’s emerging role in cloud computing and AI-driven technologies.
In practical terms, this means that a foreign cloud company — such as those offering storage, computing, or software services online — can set up data centre operations in India and earn profits from global customers without paying corporate taxes in India until 2047.
However, to benefit from this, the company must also serve Indian customers through a local reseller entity.
The minister added, “We also propose to provide a safe harbour of 15% on cost in case the company providing data centre services from India is a related entity.”Also Read: Budget 2026: Finance Minister proposes Rs 40,000-crore Electronics PLI
The move forms part of a broader government push to boost investment in data centres, a sector seen as critical for India’s digital growth and its ambitions in artificial intelligence, cloud computing, and digital public infrastructure.
The scale of spending shows how central India has become to global computing strategies. Microsoft has pledged $17.5 billion for AI-related projects in India in the next four years, Amazon plans to invest $35 billion over the next five years in AI-driven operations, and Google has committed $15 billion towards developing data centres in partnership with Adani Group and Bharti Airtel. The Economic Times had earlier reported citing sources that Meta is also developing a 500MW facility.