AI and Data Centre Stocks Rally After Budget Announces Cloud Tax Holiday in Budget 2026
- 1st February 2026
- 05:00 PM
- 2 min read
PL Capital
Summary
Budget 2026 offers a tax holiday until 2047 for foreign cloud companies operating from India-based data centres, signalling a strong policy push to attract global tech investment. The announcement lifted sentiment across data centre and AI-linked stocks.Mumbai | February 1
Data centre and AI-linked stocks jumped in mid trade on Sunday after Finance Minister Nirmala Sitharaman announced a long-term tax holiday for foreign cloud service providers in the Union Budget 2026.
The incentive applies to companies offering global cloud services from data centres located in India.
Shares of Anant Raj Industries climbed over 5% to ₹530, extending recent gains as investors welcomed the government’s push to position India as a global data centre hub. E2E Networks surged nearly 8% to ₹2,269, while Netweb Technologies rose 2.2% to ₹3,213.8 in early afternoon trade.
In her Budget speech, Sitharaman said foreign companies providing cloud services globally from India-based data centres will be eligible for the tax holiday until 2047. However, such firms will be required to serve Indian customers through domestic resellers, a condition aimed at ensuring local participation and value creation within the cloud services ecosystem.
The announcement is being seen as a strong policy signal for the broader data centre and artificial intelligence value chain, which includes real estate developers building large-scale server facilities, cloud infrastructure providers, and companies supplying high-performance computing hardware.
India has been attracting steady investment interest in data centres amid rising cloud adoption, data localisation requirements, and the rapid scale-up of AI-driven workloads across sectors.
Market participants believe the extended tax holiday provides long-term visibility for capital-intensive data centre projects, which typically involve high upfront costs and long gestation periods.
The policy clarity is expected to accelerate capacity expansion decisions by global cloud players and strengthen India’s ambition to emerge as a preferred global base for AI and cloud infrastructure.
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