As part of its Union Budget 2026-27, the Indian government has announced a tax holiday until 2047 for foreign companies that provide global cloud services using data centers located in India. The move is a clear signal of the government's ambition to establish the country as a major international hub for Artificial Intelligence and digital infrastructure, aiming to attract significant foreign investment.
The policy is set to directly benefit major technology companies like Amazon, Google, and Microsoft, which have already committed tens of billions of dollars to expanding their AI and data center capabilities in the country. The lengthy tax incentive is designed to accelerate this planned capital inflow by providing long-term certainty and making India a more cost-effective location for housing large-scale AI workloads for global customers.