India has announced a proposed tax holiday of more than 20 years for foreign companies using data centres built in the country to serve global clients, in a move aimed at strengthening its digital infrastructure and attracting long-term investment. The policy is intended to provide greater regulatory clarity and reduce litigation risks linked to potential future tax liabilities.

The announcement comes amid rapid expansion of India’s data centre sector, driven by rising demand for cloud services, artificial intelligence, and digital storage. Industry experts note that uncertainty over possible taxation of global income had previously raised concerns among foreign operators.

The proposal is expected to complement major investment plans, including Google’s announced $15 billion commitment to data centres, positioning India as a leading global digital hub.