India–US trade deal fuels fresh momentum for data centres and AI infrastructure

Indian data centres are likely to see a renewed demand upswing following the first tranche of a landmark trade agreement between India and the United States, industry experts and investors believe.

The agreement is expected to encourage greater participation by US technology companies in India’s cloud, data centre and artificial intelligence ecosystem, primarily through local partners and resellers.

“US tech firms will provide cloud services, boost data centre demand and expand AI services in India through Indian resellers,” said Pareekh Jain, Founder of Pareekh Consulting and EIIRTrends, speaking to Moneycontrol.

The trade deal acts as a second catalyst for the sector, coming soon after the Union Budget introduced multiple incentives for data centres, including a tax holiday extending up to 2047.

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Ajay Rotti, Founder and CEO of Tax Compaas, said the Budget’s safe harbour provisions had already altered industry sentiment. “The safe harbour announcement was a game changer. With the US trade relationship now firmly back on track, global MNCs looking to offshore more work will not hesitate. Overall, it is clearly positive for India,” he said.

Beyond capacity expansion, the agreement also eases concerns around India potentially building a closed, domestic technology stack. According to Jain, the deal reinforces India’s continued reliance on US technology providers. “India will continue to buy from US technology companies such as Microsoft, Google, Amazon, Salesforce, ServiceNow and Dell as part of the trade commitments,” he said.

These purchases are expected to contribute to India’s broader commitment to buy $500 billion worth of US-made goods across sectors.

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US President Donald Trump underscored the scale of the engagement in a social media post on February 3, stating that Prime Minister Narendra Modi had committed to significantly higher levels of ‘Buy American’, including large purchases of US energy, technology, agricultural and other products.

Investors view the agreement as a signal of policy continuity rather than a sharp shift. “At a macro level, the deal reinforces India’s standing as a preferred strategic partner amid global trade realignments,” Sonam Srivastava, Founder and Fund Manager at Wright Research PMS, told Moneycontrol.

While data centres may see the most immediate impact, the broader IT services industry could also benefit over the medium term. However, experts caution against expecting an immediate earnings surge.

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“If this reflects a deeper reset in US–India economic cooperation, it strengthens India’s role as a strategic technology partner rather than just a low-cost delivery hub,” said Phil Fersht, Chief Executive Officer of HFS Research. “That supports longer-term growth in engineering, AI services and platform work, though it is unlikely to materially accelerate near-term revenues or margins.”