India’s data centre investments may surge to $200 billion after Budget push: Ashwini Vaishnaw

Investments in India’s data centre sector could climb sharply to nearly $200 billion in the coming years, up from about $70 billion currently under execution, following the announcements made in the Union Budget, Union minister for electronics and information technology Ashwini Vaishnaw said on February 1.

Speaking at a press conference after the Budget presentation, Vaishnaw said the government is already witnessing strong interest from global and domestic players, including manufacturers of AI servers, looking to set up operations in India.

A key catalyst behind the projected investment surge is the extension of tax holidays for data centres, including facilities dedicated to artificial intelligence workloads. Under the latest Budget measures, these tax incentives will now remain in place until 2047, offering long-term certainty to investors in capital-intensive digital infrastructure.

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The minister said the move is expected to significantly strengthen India’s position in the global AI ecosystem. According to him, the policy support could help the country emerge among the top three AI nations worldwide by ensuring the availability of large-scale computing infrastructure domestically.

Explaining the rationale for offering such incentives, Vaishnaw linked the decision to India’s broader ambition of building a self-reliant AI economy. He said advanced digital infrastructure would be essential for supporting the next phase of industrial transformation, often referred to as the fifth industrial revolution, which is expected to be driven by artificial intelligence.

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He also highlighted India’s demographic strength as a critical advantage. With one of the largest talent pools globally, the availability of local AI infrastructure would allow domestic industry to better harness skilled manpower, rather than relying on overseas computing capacity.

Beyond data centres, Vaishnaw pointed to growing interest in AI servers and semiconductor-related investments, indicating that discussions are ongoing with industry players for the next phase of the production-linked incentive scheme for mobile manufacturing.