India, Feb. 2 -- The story about technology and AI in Union Budget 2026 begins not with start-ups, digital platforms, or digital India, but with a tax proposal aimed at global cloud companies. The Budget offers a tax holiday for more than two decades that extends till 2047 for firms that provide cloud services to overseas customers using data centre infrastructure in India. Indian users will continue to be served through domestic reseller entities. It is a long-duration incentive, unusual both in its time horizon and in what it is trying to achieve.

Rather than pushing adoption or usage, the measure is designed to anchor physical digital infrastructure inside the country. Data centres, once treated as support industry, are being position...