The government has clarified that domestic and foreign investors will receive equal treatment under the proposed 20-year tax holiday for data centre players. The move has been welcomed as a reassuring signal for the data centre industry. The announcement of a tax holiday till 2047 had earlier led to concerns that foreign hyperscalers might be given preferential treatment.
The union minister for electronics and IT clarified this week that domestic and foreign companies will be treated on a par for tax benefits related to data centres. He cited a post-budget clarification issued by the finance ministry, which provides significant relief to Indian data centre players.
While the clarification has eased immediate concerns over unequal tax treatment, industry leaders said the larger challenge is to ensure that India captures a higher share of value creation, intellectual property and global cloud revenues as the domestic data centre ecosystem continues to expand.
