I firms are zeroing in on India – and India is thinking big.
On Sunday, India’s finance minister Nirmala Sitharaman announced a bid to offer cloud providers zero taxes through 2047 on services sold globally, so long as they run those workloads from Indian data centers.
To gain this benefit, cloud providers will also need to offer services to Indian customers through an "Indian reseller entity.” The proposal also includes a 15% cost safe harbor for Indian data center operators providing services outside of the country. In a memo announcing the budget proposal, Sitharaman said the “tax holiday” aims to “enable critical infrastructure and boost investment in data centres” in the country.
It’s not the first example of India and tech companies getting cozy.
- Anthropic announced late last year that it would open an office in Bengaluru in early 2026 to “serve India’s rapidly growing AI ecosystem.”
- In October, Google announced a $15 billion investment in AI infrastructure in India. Shortly after, the company announced a partnership with the Indian telecommunications conglomerate Reliance Industries to offer Gemini to users at no additional cost for 18 months.
- OpenAI and Perplexity also offered free services to Indian customers late last year, with OpenAI offering free ChatGPT Go subscriptions to users in India, and Perplexity partnering with Bharti Airtel, India’s second-largest telecom operator, to offer a year of its services for free.
There are several benefits to AI firms investing in India. For one, compute is far less expensive in India, made even cheaper now by the proposed tax incentives. Additionally, Investing in India also gives these tech firms access to a deep talent pool in AI. Setting up shop in the country allows these firms to meet them where they are.