Strengthening in the AI infrastructure race: India proposed zero taxes - ForkLog: cryptocurrencies, AI, singularity, the future

Froklog · 2026-02-02T14:48:57+00:00

India has proposed zero taxes on cloud services for foreign suppliers until 2047, promoting investment amidst rising AI demand. Major tech firms are increasing infrastructure, but challenges like energy supply may hinder growth.

Froklog

2026-02-02 14:48:57

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# Strengthening the AI Infrastructure Race: India Proposes Zero Taxes

India has offered foreign cloud service providers zero taxes until 2047 on services sold outside the country. The mandatory condition is to run workloads from Indian data centers.

On February 1, Finance Minister Nirmala Sitharaman proposed tax holidays—effectively zero taxes—on income from cloud services that companies earn outside the country. Sales to Indian customers will be taxed at standard rates.

The announcement comes at a time when American giants like Amazon, Google, and Microsoft are seeking to expand their capacities worldwide to support the growth of AI workloads.

Meanwhile, India is becoming an attractive destination for new investments. The country offers a large talent pool and growing demand for cloud services. It positions itself as an alternative to the US, Europe, and parts of Asia.

In October, Google announced a $15 billion investment to create an AI center in the country. In December, Microsoft followed suit with an even larger sum—$17.5 billion. Amazon plans to invest $35 billion by 2030.

Domestic companies are also increasing their capacities. In November, Digital Connexion announced an $11 billion investment by 2030 to develop AI-oriented data centers with a capacity of 1 GW. Adani Group, in partnership with Google, has planned a $5 billion project.

Tech giants and startups may face challenges, as India has issues with stable energy supply and water shortages.

The Infrastructure Race

Other countries and regions are also taking active steps to build the foundation for AI operation.

In Texas, regulators approved Pacifico Energy, an energy infrastructure developer, to build a facility for data center support with a capacity of 7.65 GW. It will become the “largest gas project” in the US.

GW Ranch is designed to serve hyperscale data centers. Unlike traditional power plants, it is being developed without connection to the main power grid. This allows clients to receive energy directly from local sources, bypassing the Texas grid.

Meanwhile, British Columbia will require most new AI projects and data centers to participate in a competition for access to clean energy. The Canadian province is taking measures to manage the sharp increase in electricity demand.

The new competitive process aims to prevent overloading the energy system and ensure accessibility and reliability for existing customers.

Recall that in November, HSBC CEO Georges Elhedery stated that current AI company revenues may not justify the huge computing costs.

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