What is India's strategy for data center expansion?

India is offering a 21-year tax holiday for foreign cloud providers to boost domestic data center capacity and foster AI development, aiming to reduce reliance on overseas infrastructure.

How is artificial intelligence impacting India's data centers?

Artificial intelligence is the primary driver of data center expansion in India, with AI workloads projected to reach 50% of capacity by 2030.

What are the main challenges for India's data center growth?

Challenges for India's data center growth include significant energy and water consumption, land requirements, and the need for specialized talent.

Home / Business and Economy / India's 21-Year Tax Break Fuels Data Center Boom

India's 21-Year Tax Break Fuels Data Center Boom

8 Feb

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Summary

India offers a 21-year tax holiday for foreign cloud providers.
AI is the primary driver for data center expansion in India.
India aims to boost local AI development and infrastructure.

India's 21-Year Tax Break Fuels Data Center Boom

India's recent announcement of a 21-year tax holiday for foreign cloud providers is poised to significantly expand the nation's data center capacity. Union finance minister Nirmala Sitharaman's budget initiative has generated optimism for increased investments and employment within the technology sector. IT minister Ashwini Vaishnaw projects that India could attract over $200 billion in data center investments.

Artificial intelligence is identified as the principal catalyst for this expansion, with AI workloads projected to constitute 50% of data center capacity by 2030. This policy aims to foster domestic AI development and infrastructure, reducing India's historical reliance on overseas data storage and processing. Foreign companies must utilize Indian-owned data centers and Indian resellers to qualify for tax exemptions.