India offers foreign cloud providers zero taxes until 2047 if data runs through Indian data centers

India will collect no tax on revenues from cloud services sold overseas until 2047 provided those workloads run from Indian data centers, Finance Minister Nirmala Sitharaman announced. The policy aims to attract AI cloud investment and is tied to the government’s 2047 development goal.

India has announced a tax incentive intended to draw foreign cloud and AI investment. The government said revenues from cloud services sold overseas will face no tax until 2047, on the condition that workloads run from data centers located in India. Finance Minister Nirmala Sitharaman presented the measure as part of economic plans that treat data centers as a strategic industry. The announcement links to Prime Minister Narendra Modi's broader Viksit Bharat goal of making India a developed nation by 2047. Key details: - Zero tax on revenues from cloud services sold overseas until 2047 is available only if workloads run from Indian data centers, according to the announcement by Finance Minister Nirmala Sitharaman. - The policy applies to overseas companies, while domestic sales must be routed through locally incorporated resellers who are taxed under normal Indian rules. - The article mentions major cloud investments already pledged for India, including Google ($15 billion by 2030), Microsoft ($17.5 billion by 2029) and Amazon ($35 billion by 2030). - Critics have raised concerns about patchy power supply, high electricity costs, water scarcity and potential impacts on local communities from large data center operations. - The 21-year timeline is linked to the government’s Viksit Bharat (Developed India) objective for 2047. Summary: The measure is described as intended to attract foreign cloud investment, support job creation and position India as a global data center hub. Undetermined at this time.