3 weeks ago
India's New Tax Bill Targets Data Centres, Electronics Manufacturing Investment
India has made new rules to attract companies from other countries.
The rules give tax breaks to foreign companies that work with Indian factories to make electronics.
These tax breaks will last until 2041, which is a very long time.
Foreign companies that keep electronic parts in special warehouses in India also get tax relief for 15 years.
The new rules also make it easier to build data centres, which are big buildings full of computers that store information.
Companies no longer need as many permissions, and they can rent the buildings instead of owning them.
Business leaders say this will help India get more investment and create better technology.
Some experts also say India should make sure it controls its own digital technology even as foreign companies grow.
The main goal is more manufacturing and a stronger digital economy for India.
The new tax bill extends the income-tax exemption for foreign companies producing specified electronic goods with Indian contract manufacturers until March 31, 2041.
Foreign companies storing electronic components in customs-bonded warehouses for Indian contract manufacturers receive a 15-year tax exemption.
The bill removes approval and notification requirements for foreign companies using Indian data centres.
Data centres are now permitted to operate through leased infrastructure instead of requiring direct ownership.
Industry executives say the changes provide tax certainty that could boost investment, localisation, and supply-chain resilience.
- Who
- The Lok Sabha and Indian policymakers, supported by industry executives including Ashutosh Gupta of Summercool Home Appliances, Naman Shah of LeSol Group, and Manoj Dhanda of Utho Cloud.
- What
- Passed a new tax bill extending tax exemptions and easing regulations for electronics manufacturing and data centres.
- Where
- India.
- When
- In 2026, with the electronic-goods tax exemption running until March 31, 2041.
- Why
- To attract global investment, boost electronics manufacturing, and strengthen digital infrastructure.
Key facts
- Legislation
- Taxation Amendment Bill 2026, passed by the Lok Sabha
- Electronics manufacturing tax exemption
- Until March 31, 2041
- Customs-bonded warehouse tax exemption
- 15 years
- Data centre approvals
- Approval and notification requirements removed for foreign companies
- Data centre ownership
- Leased infrastructure now permitted
- Key industry voices
- Ashutosh Gupta (Summercool), Naman Shah (LeSol Group), Manoj Dhanda (Utho Cloud)
- Related measure
- Dividend tax relief restored for REIT and InvIT investors
- Policy goal
- Attract global capital, boost manufacturing, ease of doing business
Quotes
Ashutosh Gupta
Director of Sales & Marketing, Summercool Home Appliances Ltd.
“Recognition of leased infrastructure and removal of approval bottlenecks could accelerate investment and strengthen India’s digital infrastructure, including faster deployment of hyperscale data‑centre capacity.”
businesstoday.in
“The changes could encourage greater collaboration between global technology companies and Indian producers, helping strengthen supply‑chain resilience, competitiveness and the ability to scale production.”
businesstoday.in
Sources
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