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India to attract $200 billion investment flow into data centres: IT Minister

02 Feb 2026 Evaluate

IT Minister Ashwini Vaishnaw has said that he expects $200 billion investment to flow into data centres following the Union Budget proposed a 20-year tax holiday for foreign cloud service providers using data centres in India and rationalised the safe harbour framework for IT firms. The budget also includes a unified 15.5% safe harbour margin for all sub-sets of IT services and enhanced safe harbour thresholds. The long-term incentives to foreign cloud and tech giants are expected to turbocharge investments in cutting-edge data facilities and digital infrastructure.

Vaishnaw stated that this seen as bolstering India’s competitive advantage in the international AI landscape at a time when New Delhi is keen to take centre stage in global discourse on Artificial Intelligence. Meanwhile, the industry body, Nasscom highlighted that the budget makes an important intervention to strengthen India's cloud and digital infrastructure ecosystem. Besides, the 20-year tax holiday is expected to attract long-term global investment and support the expansion of India's compute capacity. 

It added that the focus on cloud infrastructure and long-term clarity for cloud services directly addresses a core constraint in scaling enterprise platforms, the ability to run regulated, data-intensive workloads with confidence and continuity. As India speeds to build digital infrastructure on a global scale, it has seen a surge of major data centre investment commitments over the past year. The tech giants like Google have pledged around $15 billion to establish an AI-ready data centre hub in Andhra Pradesh, while Microsoft is investing $17.5 billion to expand cloud and AI infrastructure in the country.

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