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India must scale up its artificial intelligence investment beyond the current USD 1.2 billion to stay competitive globally, according to a senior NVIDIA executive. While the Union Budget 2026-27 has introduced a 20-year tax holiday up to 2047 for foreign companies using Indian data centres, creating a strong base for AI infrastructure, the overall funding remains limited. With 1,800 global capability centres operating in India and employment set to rise, higher AI spending is seen as essential to support large-scale innovation and global deployment.
India will need to significantly increase its investment in artificial intelligence to align with global benchmarks, even as recent Budget measures have created a strong base for expanding AI infrastructure, according to a senior executive from NVIDIA. Speaking at an industry forum, the executive pointed out that India's current AI investment stands at around USD 1.2 billion, which, while encouraging, remains modest when compared to the scale required for population-level and globally competitive AI deployment. Advertisement
The senior vice president for enterprise business at NVIDIA noted that nearly 1,800 out of about 2,000 large global corporations operate global capability centres in India. These centres currently employ over 2 million professionals, a figure expected to rise to nearly 3 million in the near term. Each of these centres, he explained, will increasingly require its own local AI infrastructure to convert proprietary data, processes, and intellectual property into usable intelligence, making India a natural base for such development.
He highlighted that the Union Budget for 2026-27 has addressed a long-standing concern of foreign companies by offering a 20-year tax holiday, extending up to 2047, for those procuring data centre services in India. This move removes uncertainty around the taxation of global income and applies uniformly, whether companies build their own data centres or use third-party facilities within the country. According to him, this ensures a level playing field and positions the policy as core infrastructure support rather than a short-term incentive.
While acknowledging that the USD 1.2 billion already committed to AI infrastructure is being used efficiently, the executive placed it in the wider context of India's annual core infrastructure spending, which is estimated at around USD 150 billion. He said that investments in roads, railways, ports, airports, and power grids are essential, but similar scale and urgency are now required for AI infrastructure if India is to strengthen its manufacturing and services footprint globally.
India's AI ambitions are also supported by earlier government decisions. The Union Cabinet, led by Narendra Modi, approved a national-level IndiaAI mission in 2024 with an outlay of INR 10,371.92 crore. The mission is designed to build a broad AI ecosystem through coordinated public and private sector programmes, encouraging innovation, skills development, and infrastructure creation.
NVIDIA, which holds a dominant position in the global GPU market, plays a central role in the AI value chain, as such processors are critical for training and deploying advanced AI models. Industry leaders believe that with policy clarity and sustained capital infusion, India can emerge as a key hub for AI-led services and technology exports.
Source PTI
FAQ
1. Why does India need to increase its investment in artificial intelligence?
According to a senior executive from NVIDIA, India's current AI investment of about USD 1.2 billion is insufficient to compete globally. Larger funding is required to support population-scale AI applications, advanced model training, and global deployment of AI-driven services.
2. How does the Union Budget 2026-27 support AI and data centre growth?
The Union Budget 2026-27 introduced a 20-year tax holiday, valid until 2047, for foreign companies using data centres in India. This removes long-standing tax uncertainties and strengthens India's position as a preferred base for AI and digital infrastructure.
3. What role do global capability centres (GCCs) play in India's AI ecosystem?
India hosts around 1,800 global capability centres run by multinational corporations, employing over 2 million professionals. These centres increasingly require local AI infrastructure to process proprietary data and intellectual property, driving demand for domestic AI compute and data centres.
4. How does AI investment compare with India's overall infrastructure spending?
While India spends nearly USD 150 billion annually on core infrastructure such as roads, railways, ports, and power, AI investment remains relatively small. Industry leaders argue that AI infrastructure now requires similar scale and urgency to sustain India's global manufacturing and services competitiveness.
5. What government initiatives support India's long-term AI ambitions?
In 2024, the Union Cabinet led by Narendra Modi approved the IndiaAI Mission with an outlay of INR 10,371.92 crore. The programme aims to build a national AI ecosystem through infrastructure development, innovation support, and skill creation.
6. Why is NVIDIA's perspective significant in the AI investment debate?
NVIDIA dominates the global GPU market, with its processors forming the backbone of AI training and deployment worldwide. Its assessment carries weight as GPUs are critical to AI scalability, and its outlook highlights the importance of sustained capital infusion alongside supportive policy frameworks.
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