India Announces 20-Year Tax Holiday for Global AI & Cloud Hubs 📈

India’s 2026-27 Budget introduces aggressive incentives to position the nation as a global leader in AI and ICT/BPM infrastructure, directly impacting regional tech competition. • Tax Incentives: A 20-year tax holiday (until 2047) for foreign cloud providers on revenue from services sold outside India, if delivered via local data centres. • Investment Inflow: Global giants have committed massive capital, including Amazon (US$ 35 Bn), Microsoft (US$ 17.5 Bn), and Google (US$ 15 Bn). Domestic players like Reliance and Adani are also investing billions in AI campuses. • Capacity Growth: India’s data centre power capacity is projected to jump from ~1 GW to 2 GW by 2026, potentially reaching 8 GW by 2030, backed by over US$ 30 Bn in capital. • Semiconductors & Electronics: Budgeted spending for the Electronics Components Manufacturing Scheme increased to INR 400 Bn (from INR 229.19 Bn). A second phase of the India Semiconductor Mission will focus on local chip IP and equipment. • Operational Challenges: Despite the incentives, scaling remains constrained by high electricity costs, power availability, and water stress. _Context_: These moves signal a significant shift in regional digital infrastructure, as India aggressively courts the high-tech manufacturing and data services sectors.