India Unveils Strategic Tax Incentive Framework to Establish Global Data Sovereignty Hub Through 2047

In a landmark fiscal policy announcement, Union Finance Minister Nirmala Sitharaman has instituted a transformative tax certainty regime for data center infrastructure development. The 2026 budget introduces an unprecedented tax holiday extending through 2047—spanning over two decades—specifically targeting enterprises establishing data center operations within India's borders. This strategic incentive is designed to catalyze massive capital investment in digital infrastructure, positioning India as a dominant global hub for data sovereignty and cloud computing services. The policy framework grants tax certainty to corporations providing data center services to their own group entities from Indian soil, creating a compelling value proposition for multinational technology conglomerates and domestic enterprises alike. Analysis indicates this long-term fiscal stability will accelerate India's transition toward technological self-reliance while attracting an estimated $50-75 billion in foreign direct investment over the coming decade. The extended timeline through 2047 provides unparalleled predictability for infrastructure planning cycles, enabling corporations to deploy next-generation quantum computing facilities and artificial intelligence clusters with confidence. This initiative represents a cornerstone of India's broader digital economy strategy, simultaneously addressing data localization requirements while fostering indigenous innovation ecosystems. The policy's implementation is projected to generate approximately 300,000 high-skilled technology jobs and establish India as a primary alternative to traditional data center markets in Southeast Asia and Europe.