Union Budget 2026: Tax Holiday Till 2047 for Foreign Data Center Firms in India

• Union Finance Minister Nirmala Sitharaman proposed a tax holiday until 2047 for foreign companies establishing data centers in India.
• The initiative aims to boost investment in critical infrastructure, capitalize on the data center boom, and encourage AI-driven tech startups.
• Foreign firms must provide cloud services globally from India but serve Indian customers through a local reseller entity.
• A safe harbor of 15 percent on cost is proposed for related entities providing data center services from India.
• The budget also announced dedicated rare earth corridors in Tamil Nadu, Kerala, Odisha, and Andhra Pradesh to promote mining and processing.

Why It Matters: India offers a significant tax holiday to foreign firms for data centers, aiming to boost AI infrastructure and tech growth.