Budget move offering tax holiday for AI-focused data centres till 2047 seen as catalyst for next wave of technology-led export growth
The Union Budget’s announcement of a tax holiday until 2047 for foreign investors setting up artificial intelligence (AI)-focused data centres in India for global use is being seen by industry observers as a major shift in the country’s digital growth strategy.
Experts say the move could trigger what some describe as India’s “AI Boom 3.0”, following earlier waves of growth led by business process outsourcing (BPO) and IT services exports.
India’s earlier rise as a global services hub was driven by English-speaking talent and time-zone advantages during the BPO expansion of the 1990s and early 2000s. This was followed by the IT services boom of the 2000s and 2010s, supported by large-scale outsourcing and global technology transitions, which helped build a multi-billion-dollar technology services industry.
Industry representatives say the current policy push is distinct in its focus on building AI capabilities for global deployment from India.
Shubham Mishra, Founder of Rock My Sales, said the development marks a transition in India’s role in the global technology ecosystem. “For the first time, policy is clearly aligned toward building AI for global use from India. That shifts India’s role from being a back-office executor to becoming a creator and exporter of intelligence,” he said.
India’s large STEM talent base is expected to be a key enabler. The country produces an estimated 1.5 million STEM graduates annually, providing a substantial workforce for AI development, model training and optimisation.
Latika Sharma, Managing Partner at Rock My Sales, said the combination of long-term policy support and talent scale could strengthen India’s competitiveness in AI services. She noted that lower-cost AI infrastructure could help India emerge as a high-scale AI services exporter while also building domestic intellectual capital.
Industry observers also believe that improved access to AI computing infrastructure may benefit Indian businesses across sectors, including marketing and analytics, by making advanced AI tools more accessible.