India Must Ramp Up AI Investment, Nvidia Welcomes Tax Holiday

23 Feb 2026 CW Team

Of 2,000 global corporations, 1,800 have a major global capability centre in India, currently employing over two million people and shortly expected to grow to three million. The executive said each of these centres will require a local AI factory to convert local data, business processes and intellectual property into intelligence, creating demand for data centre services and specialised compute infrastructure.

The official noted that although one point two billion dollars invested into AI infrastructure is commendable, it is small compared with the overall investment in core infrastructure, which is now of the order of 150 billion dollars a year. The official argued that the current level of funding for the AI mission is insufficient to create population-scale AI and to position India on manufacturing and services maps both domestically and internationally, and urged higher investment as the economy grows.

The official highlighted Nvidia's position in the graphics processing unit (GPU) market and described the Budget provisions as a very big opportunity that provides foundational infrastructure. The Union Cabinet had approved a national IndiaAI mission with a Budget outlay of Rs 103.72 billion (Rs 10,371.92 crore) to establish a comprehensive ecosystem catalysing AI innovation through strategic programmes and partnerships across the public and private sectors. The tax treatment will be the same whether a global company builds its own data centre in India or procures services from an Indian provider, ensuring a level playing field.

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India needs to scale up investment in artificial intelligence from the current one point two billion dollars to match global levels, and the Union Budget's announcement of a 20-year tax holiday for foreign companies that procure data centre services offers foundational infrastructure for expanding AI, a senior Nvidia executive said at the AI Impact Summit 2026. The tax measure is intended to allay fears of global income being taxed by Indian authorities. Of 2,000 global corporations, 1,800 have a major global capability centre in India, currently employing over two million people and shortly expected to grow to three million. The executive said each of these centres will require a local AI factory to convert local data, business processes and intellectual property into intelligence, creating demand for data centre services and specialised compute infrastructure. The official noted that although one point two billion dollars invested into AI infrastructure is commendable, it is small compared with the overall investment in core infrastructure, which is now of the order of 150 billion dollars a year. The official argued that the current level of funding for the AI mission is insufficient to create population-scale AI and to position India on manufacturing and services maps both domestically and internationally, and urged higher investment as the economy grows. The official highlighted Nvidia's position in the graphics processing unit (GPU) market and described the Budget provisions as a very big opportunity that provides foundational infrastructure. The Union Cabinet had approved a national IndiaAI mission with a Budget outlay of Rs 103.72 billion (Rs 10,371.92 crore) to establish a comprehensive ecosystem catalysing AI innovation through strategic programmes and partnerships across the public and private sectors. The tax treatment will be the same whether a global company builds its own data centre in India or procures services from an Indian provider, ensuring a level playing field.

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