A parliamentary panel has flagged high hardware costs, global supply chain delays, heavy power and water consumption by data centres, and a tax holiday as significant issues facing India’s plans to establish large clusters of graphics processing units.
The Parliamentary Standing Committee on Communications and Information Technology, in its latest report, suggested that the Ministry of Electronics and Information Technology (MeitY) consult stakeholders, academics, and environmentalists on how to address these challenges.
The committee’s concerns come at a time when rising domestic demand and soaring global costs have made integrated circuits India’s third largest import item, after crude oil and gold. In the first nine months of financial year 2026 (April to December), India imported chips worth $12.62 billion, according to official figures.
The panel also called for the ministry to meet with budget experts, referring to the government’s announcement of a tax holiday until 2047 for any foreign company that provides cloud services to global customers using data centre facilities in India. The committee additionally highlighted uncertainties over the development of sovereign artificial intelligence models in the report.
