- The tax holiday proposed in the Union Budget will be till 2047
- Investment in critical infra that will play a bigger role in the future was one of the themes of the budget
- The push was also reflected in Sitharaman's proposal of a Rs 40,000-crore outlay for semiconductors
Giving a big push to the growth of information technology and artificial intelligence in India, Finance Minister Nirmala Sitharaman has announced a tax holiday till 2047 for companies providing cloud services by setting up data centres in the country.
Presenting the Union Budget on Sunday, Sitharaman said the government recognises the need to enable critical infrastructure and attract investment.
"I propose to provide tax holiday till 2047 to any foreign company that provides cloud services to customers globally by using data centre services from India," she said, adding, "It will, however, need to provide services to Indian customers through an Indian reseller entity. I also propose to provide a safe harbour of 15% on cost in case the company providing data centre services from India is a related entity."
Last year, Google had announced that it would invest $15 billion over five years to set up an artificial intelligence data centre in Andhra Pradesh. The 1-gigawatt data centre campus, which will be set up in Visakhapatnam, was touted as a major victory for India's attempts to be an even bigger player in the IT sector and boost its presence in artificial intelligence - an area in which it is seen to have some catching up to do.
Investment in critical infrastructure that will play a bigger role in the future was one of the themes of the budget and Sitharaman also announced that dedicated rare earth corridors will be set up in four states - Tamil Nadu, Kerala, Odisha and Andhra Pradesh.
"The scheme for rare earth permanent magnets was launched in November 2025. We now propose to support the mineral-rich states of Odisha, Kerala, Andhra Pradesh and Tamil Nadu to establish dedicated rare earth corridors to promote mining, processing, research and manufacturing," the finance minister said.
Rare earths are crucial in everything from consumer electronics, like smartphones, to electric vehicles and even fighter jets, and the announcement will help reduce India's dependence on China for them.
The IT infrastructure push was also reflected in Sitharaman's proposal of a Rs 40,000-crore outlay for semiconductors as part of the 'India Semiconductor Mission 2.0'.
Apart from industry-led research and training centres for semiconductors, the minister said the mission "will focus on producing equipment and materials designed for full-stack Indian IP (intellectual property)".
