India Proposes 20-Year Tax Holiday for Data Centres
The government has drafted a National Data Centre Policy that includes a tax holiday of up to 20 years for developers. The move aims to attract large-scale investments while boosting capacity, energy efficiency, and employment.
Incentives Under the Policy
The draft policy proposes GST input tax credits on capital assets such as construction material, electrical equipment, HVAC, and cooling systems. Foreign firms operating or leasing at least 100 MW of capacity through Indian entities may also be granted permanent establishment status.
Land and Power Support
States will be encouraged to earmark land near industrial corridors, IT hubs, and manufacturing clusters for data centre parks. Coordination among ministries has been suggested to ensure uninterrupted electricity supply, with emphasis on renewable energy usage.
Industry Growth Projections
India’s data centre capacity is projected to grow by 795 MW by 2027, reaching around 1,825 MW in total. With occupancy levels already at 75-80%, demand continues to outpace supply. The policy aims to direct investment into Tier II and Tier III cities, enhancing India’s position in AI, cloud services, and cybersecurity.India drafts policy offering 20-year tax holiday and GST relief to boost data centres.
