Summary:
The Draft National Data Centre policy of the Government of India has proposed tax exemption for data centre developers up to 20 years, to accelerate investment, reduce capital costs and promote large-scale infrastructure growth. The policy introduces integrated approvals, structural status and domestic production incentives, which gives India four times the capacity of its data centre by 2030.
The Government of India has unveiled a new draft National Data Centre policy which offers long-term tax exemption and GST benefits to attract investment in this area. Developers who meet the capacity expansion, energy efficiency and targets of generating employment can be achieved for up to 20 years. Additional benefits include input tax credit on GST for capital assets such as IT equipment, HVAC and construction materials, which help reduce clear costs.
🚨 India proposes tax exemption of up to 20 years for data centre developers. pic.twitter.com/jDWOvlco1g
— Indian Tech & Infra (@IndianTechGuide) September 15, 2025
Key Features of the Draft National Data Centre Policy
- Single-window clearance to simplify approvals and cut bureaucratic delays.
- Economic zone dedicated to data centres in both metros and small cities.
- Infrastructure status to ensure power, skilled labor and good access to finance.
- Land subsidy and power reforms to make large-scale projects more practical.
- Standard building codes for similar construction standards in states.
Domestic Ecosystem Incentives
- Promotes Make in India production for IT and non-IT components
- R&D grants, patent cost reimbursements and skill development programs to strengthen India’s technical ecosystem.
- Ability construction initiative to develop special data centre workforce.
Why It Matters
With increasing digital consumption, AI adoption and cloud demand, India requires stronger data infrastructure. The government expects that these reforms will fourfold India’s data centre capacity by 2030, which gives investors confidence through regulatory clarity and financial incentives.
Draft National Data Centre Policy suggests India’s commitment to become a global digital infrastructure hub, which gives developers 20 years old tax breaks, infrastructure benefits and unified clearance to developers-one step to attracting important FDI and domestic investment over the years.
