India's Union Finance Minister Nirmala Sitharaman has defended the Finance Bill 2026, which includes tax holidays for data centers, amid concerns over the country's economic situation.
The Finance Bill proposes a tax holiday till 2047 for foreign companies providing cloud services to customers globally using data center services from India. Sitharaman argued that the tax holiday comes with 'structural conditionalities' to ensure domestic value creation and that investments worth $70 billion in data centers are already underway.
She also highlighted that the tax holiday is available only when foreign cloud providers utilize data center services located in India with physical infrastructure, ensuring that operations, maintenance, and jobs largely stay local.
The Finance Minister also addressed concerns over the impact of the war in West Asia on the Indian economy, stating that the government is prepared to address any challenges that may arise.
Opposition leaders, including Congress leader Manish Tewari and Deepender Singh Hooda, criticized the budget, citing concerns over the weak Indian currency, high prices of essential items, and the country's economic situation.
The Lok Sabha passed the Finance Bill 2026 after discussions, with Sitharaman emphasizing that the bill rests on five clear principles, including trust-based tax administration, ease of living for common citizens, and making India a stronger global business hub.
