The Union Budget 2026-27 introduces major tax benefits to attract foreign companies, talent, and investment in India. It focuses on data centers, electronics manufacturing, toll manufacturing, and skilled professionals, making it easier and cheaper for them to operate in India.
Big Tax Breaks for Cloud Companies
New Delhi: The Indian government wants more foreign companies to build data centers in India. To encourage this, it is offering a tax holiday until 2047 for companies that provide cloud services to the world. They must serve Indian customers through an Indian partner.
If a foreign company has an Indian branch or subsidiary, the government will tax them only on 15% of their costs. This makes it cheaper and simpler for companies that already have business in India.
Foreign companies storing electronic parts in bonded warehouses in India will pay very low taxes — just about 0.7%. This encourages companies to keep their inventory in India, making manufacturing faster and cheaper.
Union Budget 2026 has allocated ₹7.85 lakh crore to defence sector
Foreign companies providing machines or tools to Indian factories will get 5 years of tax exemption. This helps Indian factories grow while making it easier for suppliers to invest.
The government wants experts from around the world to work in India. They can earn money globally without paying tax in India for up to 5 years, making India an attractive place for talent.
Foreign companies paying tax on estimated profits will not have to pay extra minimum taxes. This simplifies operations for smaller or new companies entering India.
Overall, the Budget is designed to bring more investment, create jobs, and boost technology in India. With easier tax rules, the country hopes to attract global companies, skilled professionals, and advanced manufacturing to its shores.
