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There is a renewed focus on the policy architecture. India at present has a combination of enabling measures rather than a unified regulatory framework. For example, the Union Budget 2026–27 proposed a tax holiday until 2047 for eligible foreign cloud providers[1] using India-based data centers for global operations, thereby providing long-term investment certainty. The Ministry of Electronics and Information Technology has re-initiated consultations on a revised National Data Centre Policy to focus on areas such as streamlining approvals, enabling distributed capacity beyond metropolitan clusters and aligning incentives with AI-driven infrastructure needs. This is an opportunity to shape a more cohesive policy framework.
Many state governments have already introduced dedicated data center policies offering incentives around land, power and approvals, including single-window mechanisms and renewable energy linkages. These measures help to facilitate data center approvals and support capacity development across states.
These efforts show early momentum but have also resulted in divergence in processes, timelines and data center compliance expectations. As operators scale across multiple states, this variation creates execution delays and operational inefficiencies.
What India now needs is a national framework that need not displace state initiatives but establishes a common baseline that enhances predictability while preserving flexibility.
Global practice offers useful guidance on how such a baseline might evolve. The European Union has prioritized transparency as an entry point, requiring large data centers to report energy performance and water usage into a common database, thereby building an evidence base for future policy. Singapore, with its land and energy constraints, has linked capacity approvals to sustainability benchmarks such as efficiency standards and green-energy commitments. Saudi Arabia's regulatory framework focuses on service quality, provider accountability and operational standards, reinforcing trust in the ecosystem. Together, these approaches offer relevant lessons for data center governance.