Finance Minister Nirmala Sitharaman proposed in her Budget 2026 speech a tax holiday until 2047 for foreign companies that provide cloud services globally if they use data centre services based in India. Firms must also serve Indian customers via a local reseller and related-entity data centre providers get a 15% safe-harbour on cost; the move aims to spur data-centre investment.
Key Points
- 1Proposes tax holiday until 2047 for foreign cloud firms using Indian data centres
- 2Aims to attract global investment and strengthen India's data infrastructure for cloud and AI growth
- 3Requires service to Indian customers via local reseller, enabling conditional tax-free global profits
Scoring Rationale
Official, wide-reaching budget incentive that fundamentally reshapes cloud investment, strong credibility and immediate industry impact.
Sources
Public references used for this report.
View 2 more sources
- 04Tax Holiday Till 2047: How India Wants To Power The World’s Cloud Tax Holiday Till 2047: How India Wants To Power The World’s Cloudinc42.com
- 05Modi govt’s big boost to data centres in Budget 2026: Read how global cloud giants are being welcomed to invest in India, and why some domestic players are concernedopindia.com
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