India’s Data Centre Industry Seeks Incentives Ahead of Union Budget 2026-27

Industry Demands

Ahead of the Union Budget 2026-27 (to be presented on February 1), India’s data centre industry is pressing for:

• Incentives on renewable energy usage to lower operational costs and promote sustainability.
• Funding support to accelerate infrastructure expansion.
• Multi-year bankable government contracts to provide stability and attract long-term investment.

Context

The push comes after a landmark year in which data centres became central to India’s AI ambitions, drawing record investments from global technology giants.

Government Priorities

The upcoming budget is expected to place strong emphasis on:

• Artificial Intelligence (AI) development.
• Data centre expansion, to position India as a global hub for digital infrastructure.
• Investment attraction, with policies designed to bring in far greater global capital into the AI ecosystem.

Opportunity Landscape

• India generates nearly 20% of the world’s data, yet hosts only about 3% of global data centre capacity.
• This mismatch presents a massive investment opportunity for both domestic and international players.

Recent Developments

• In the December quarter, Google announced a $15‑billion investment to establish an AI hub in Visakhapatnam, underscoring global confidence in India’s digital growth story.

Outlook

With strong industry demands and government focus, the 2026‑27 budget could mark a turning point for India’s data centre ecosystem. If incentives and support measures are introduced, India may rapidly scale capacity, reduce import dependence, and strengthen its position as a global AI and data hub.