India: Minister of Finance proposed tax holiday till 2047 for foreign cloud services using data centre services from India in Budget 2026-2027

On 1 February 2026, the Minister of Finance proposed, in the Budget 2026-2027 Speech (Budget Speech), a tax holiday till 2047 for any foreign company that provides cloud services to customers globally by using data centre services from India, as a direct tax measure under “Attracting global business and investment”. In particular, the foreign company will need to provide services to Indian customers through an Indian reseller entity, and sales of such services to Indian users shall be made through an Indian reseller entity and taxed appropriately. The Budget also includes a safe harbour of 15 percent on cost where the company providing data centre services from India is a related entity, and it proposes a safe harbour of 15% for the resident entity providing data centre services to a related foreign company providing cloud services outside India.