In a landmark budgetary move, India has implemented transformative fiscal policies designed to position itself as a global investment hub while aggressively expanding its digital infrastructure capabilities. The 2026 budget proposals introduce unprecedented incentives for non-resident Indians (NRIs), overseas citizens of Indian origin, and foreign corporations seeking investment opportunities in the world’s fastest-growing major economy.
Significant enhancements to the portfolio investment scheme now permit individual NRI investors to increase their equity holdings in listed Indian companies from 5% to 10%, while the aggregate investment ceiling for all NRIs and persons of Indian origin has been substantially raised from 10% to 24%. The government has simultaneously streamlined property transaction procedures, eliminating the cumbersome tax account number requirement in favor of simplified permanent account number documentation when non-residents sell immovable assets to Indian residents.
Perhaps the most revolutionary measure involves a comprehensive 21-year tax exemption for foreign companies utilizing Indian data center services for global operations. This complete profit tax waiver, extending through 2047, is complemented by safe harbor provisions that establish 15% of gross receipts as deemed taxable income for Indian entities providing data services to related foreign corporations. Additionally, foreign technicians and experts working under notified schemes will enjoy complete exemption from Indian taxation on foreign income for five years, regardless of residential status under domestic tax laws.
The digital infrastructure expansion strategy reveals ambitious targets to increase India’s data center capacity from the current 1.5 GW to 14 GW by 2035. Major technology conglomerates including Microsoft, Amazon, Google, and Meta have committed approximately $67.5 billion in combined investments toward AI-driven projects and data center development over the next five years. Hyderabad has emerged as the fastest-growing hub, offering operational costs at less than half of American electricity rates while maintaining multiple energy source connectivity.
The hospitality sector simultaneously receives substantial stimulus through tax deductions for capital expenditures under Section 46 of the Income Tax Act, 2025. Pre-operative expenses for new hotel developments can now be deducted in the financial year when operations commence, with several state governments offering additional fiscal concessions to boost tourism employment opportunities. This comprehensive economic strategy aligns with projections that India’s digital economy will constitute 20% of GDP by 2030, supported by anticipated 7% annual GDP growth and expansion of the middle class by 400 million people within 15 years.