India Zero Tax AI Workloads

What happened

New Delhi introduced a zero-tax policy for foreign companies providing global cloud services from data centres in India, effective until 2047. This policy change removes tax obligations for qualifying AI operations within India, altering the financial landscape for companies like Amazon, Google, and Microsoft, who are currently expanding data centre investments in the region. The incentive applies if global firms operate via Indian data centre developers and resellers for hosting global cloud service providers.

Why it matters

This policy introduces a significant financial constraint shift for global AI workload deployment strategies. Procurement and finance departments must now re-evaluate cost models for AI infrastructure, potentially increasing exposure to new jurisdictional compliance requirements. The change also tightens dependency on India's regulatory stability for long-term operational planning, impacting platform operators' deployment decisions and increasing due diligence for legal and compliance teams.