India Offers Zero-Tax Incentives to Attract Global AI Cloud Investment
In a bid to move ahead in the global race to build artificial intelligence–driven infrastructure, India has proposed a zero-tax regime for foreign cloud service providers through 2047. Under the proposal, income earned from services operated from Indian data centres but sold abroad will be exempt from taxation. The announcement was made on Sunday by Finance Minister Nirmala Sitharaman while presenting the country’s annual budget, TechCrunch reported.
She said that services sold to Indian customers must be provided through locally registered resellers and will remain subject to domestic taxes. The budget also proposes a 15 percent “cost-plus” safe harbour for Indian data centre operators working with foreign companies.
US technology giants such as Amazon, Google, and Microsoft are expanding data centre capacity worldwide to meet the growing demands of artificial intelligence workloads. India’s latest initiative is aimed at positioning the country as a new and attractive destination for such large-scale investments.
However, analysts caution that challenges such as power supply constraints, high electricity costs, and water shortages could pose significant hurdles to the expansion of AI-driven data centres in the country.
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