Union Budget 2026 lays strong foundation for AI data centres and semiconductor ecosystem
The Union Budget 2026-27 sets a robust framework for the development of AI data centres and the semiconductor ecosystem in India, aiming to position the country as a global leader in AI and cloud infrastructure. Union Minister Ashwini Vaishnaw emphasized the critical role of AI data centres in supporting digital architecture, with significant investments of approximately USD 70 billion already underway. To further stimulate growth, the budget introduces a tax holiday until 2047 for foreign cloud service providers utilizing Indian data centres. Additionally, the launch of India Semiconductor Mission (ISM) 2.0 aims to enhance local manufacturing and design capabilities in the semiconductor sector, supported by a substantial budget allocation. The Electronics Components Manufacturing Scheme (ECMS) also sees increased funding, reflecting a strong industry response and commitment to advancing India's electronics manufacturing landscape.
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