India has announced a massive incentive for the tech sector. Foreign companies using local data centres to serve global clients will now enjoy a tax exemption until 2047.
Finance Minister Nirmala Sitharaman revealed the policy during her 2026-27 budget speech. She stated that India will provide a “tax holiday till 2047” to foreign entities providing cloud services via Indian infrastructure. Consequently, this move aims to settle investor nerves regarding fiscal liabilities.
Previously, foreign companies hesitated. They feared New Delhi might tax their global income if they utilised data centres within the country. However, the government has now addressed these concerns directly.
Vaibhav Gupta, a partner at tax firm “Dhruva Advisors”, welcomed the clarity. He noted that the announcement lends stability to the tax position of foreign companies in India. Therefore, these firms no longer need to worry about potential taxes on their worldwide income.
Global tech giants are already capitalizing on India’s infrastructure. Google announced a $15 billion investment in October for an AI data centre project in Andhra Pradesh. Similarly, Microsoft and Amazon have poured billions into the sector.
Domestic heavyweights are also joining the race. Indian conglomerates like “Adani” and “Reliance” are currently investing significantly in data centre capabilities.
IT Minister Ashwini Vaishnav emphasised the strategic importance of this sector. He told reporters that data centres will become a “major strength” for India. Through this infrastructure, the country aims to provide new services to the world.