India has taken a decisive step to cement its position in the global cloud and data infrastructure race, announcing that foreign companies using data centers located in the country to serve customers worldwide will not be taxed on their global income for more than two decades.

The policy, unveiled as part of the 2026–27 federal budget, is designed to remove a major source of regulatory uncertainty that had quietly worried multinational technology firms, even as they invested billions of dollars in India’s fast-growing digital infrastructure.

Finance Minister Nirmala Sitharaman used her budget speech to deliver the assurance, saying India would “provide a tax holiday till 2047 to any foreign companies that provide cloud services to their customers globally, by using data center services from India.” The move effectively guarantees that merely hosting or routing global cloud services through Indian data centers will not create future tax liabilities on overseas income.

The announcement addresses a long-standing concern among foreign firms that New Delhi could, at some point, interpret tax rules in a way that treats the use of Indian-based data centers as establishing a taxable presence. Such fears had persisted despite India’s push to attract global technology capital and despite repeated assurances that the country wants to be seen as a stable, predictable destination for long-term digital infrastructure investment.

Vaibhav Gupta, a partner at tax advisory firm Dhruva Advisors, said the measure provides clarity and long-term stability. According to him, foreign companies no longer need to worry that their global revenues could be brought into India’s tax net simply because they rely on data center capacity in the country. By extending the assurance until 2047, the government is offering a time horizon that aligns with the lifespan of large-scale data center investments, which typically span decades.

India’s data center sector has expanded rapidly in recent years, driven by rising domestic demand for digital services and by global companies seeking alternative hubs outside China and traditional markets such as Singapore. Dozens of hyperscale and colocation data centers have been built or are under construction across states, including Maharashtra, Tamil Nadu, Telangana, and Andhra Pradesh, supported by improving power availability, expanding fiber-optic networks, and state-level incentive packages.

Global technology giants have already made major commitments. Google said in October it would invest $15 billion in an artificial intelligence-focused data center project in Andhra Pradesh. Microsoft and Amazon have poured billions of dollars into expanding their cloud and data infrastructure footprint in India, while domestic conglomerates such as Reliance Industries and the Adani Group have also stepped up investments, betting on long-term growth in cloud computing, AI, fintech, and streaming services.

Yet despite this momentum, lawyers told Reuters that uncertainty around future tax treatment had remained a quiet but persistent concern, particularly for companies using Indian facilities to serve customers entirely outside the country. The new tax holiday is intended to eliminate that risk and make India more competitive against rival data center hubs in Southeast Asia, the Middle East, and Europe.

Information Technology Minister Ashwini Vaishnav framed the policy as part of a broader national strategy.

“Data centers will be a major strength for India through which we can provide new services to the world,” he told reporters, signaling that the government views digital infrastructure as an export platform, not just a domestic enabler.

The move comes as global demand for data center capacity is surging as artificial intelligence, cloud computing, and data-intensive applications expand at a rapid pace. At the same time, companies are grappling with rising costs, power constraints, and regulatory bottlenecks in traditional data center locations. India is seeking to position itself as a cost-effective alternative, with a large talent pool, growing renewable energy capacity, and now, long-term tax certainty.

By extending the tax holiday to 2047, the centenary of India’s independence, the government is also making a symbolic statement about policy continuity. Analysts say the assurance reduces regulatory risk and could accelerate the next wave of investments, particularly in AI and high-performance computing, where firms require predictable operating conditions over long periods.

While Google, Microsoft, and Amazon did not immediately comment on the announcement, industry watchers say the policy could tilt future investment decisions in India’s favor, especially as companies reassess where to locate energy-hungry computing infrastructure. The move also complements India’s broader efforts to promote green data centers, with several states offering incentives for renewable-powered facilities as scrutiny grows over the carbon footprint of global computing.

In effect, New Delhi is trading potential future tax revenue for deeper integration into the global digital economy. By anchoring cloud infrastructure and data processing within its borders, India hopes to capture spillover benefits in jobs, skills, innovation, and exports. If the strategy succeeds, data centers could emerge as a core pillar of India’s growth story in the digital age, much as manufacturing was for earlier generations of emerging economies.

The Federal Government has taken a significant step toward positioning Nigeria at the center of Africa’s electric vehicle transition, signing a Memorandum of Understanding with South Korea’s Asia Economic Development Committee (AEDC) to establish what is being described as the continent’s first large-scale electric vehicle manufacturing plant, alongside nationwide charging infrastructure.

But the plan has been greeted with a mix of optimism and caution, as observers warn that the country may not yet have the fundamentals required to sustain a viable EV market.

The agreement with AEDC, executed on January 30, 2026, by the Minister of State for Industry, Senator John Enoh, on behalf of Nigeria, and AEDC Chairman Yoon Suk-hun, is being positioned as a cornerstone of the country’s green industrial strategy.

According to the National Automotive Design and Development Council (NADDC), the project will be implemented in phases, beginning with EV assembly before expanding into full local manufacturing. At peak capacity, the plant is expected to produce up to 300,000 vehicles annually and create about 10,000 direct jobs. Authorities say the initiative aligns with Nigeria’s National Energy Transition Plan and the National Automotive Industry Development Plan, both of which aim to reduce carbon emissions, promote local manufacturing, and reposition Nigeria as a regional automotive hub.

The Director-General of NADDC, Otunba Oluwemimo Joseph Osanipin, said the partnership would accelerate technology transfer, attract investment, and strengthen research, design, and innovation within the automotive ecosystem. He added that Nigeria is steadily building a sustainable framework that supports green energy adoption and global competitiveness.

While the move is widely seen as plausible on paper, analysts point to the country’s persistent electricity crisis as a fundamental constraint. Nigeria’s national grid remains unstable, with frequent collapses and generation levels that struggle to meet basic household and industrial demand. For many, the idea of rolling out large-scale EV charging infrastructure in such an environment appears, at best, premature.

Electric vehicles rely heavily on consistent and affordable electricity, not only for private charging but also for commercial fleets, logistics operators, and public transport systems that policymakers hope will drive early adoption. In Nigeria, where millions of households rely on petrol and diesel generators for daily power needs, critics argue that charging EVs would simply shift emissions and costs from fuel tanks to generators, undermining the environmental and economic rationale of the transition.

Infrastructure gaps extend beyond electricity. Poor road networks, limited grid coverage outside major urban centers, and the absence of a coordinated national charging framework all pose significant hurdles. Even in Lagos and Abuja, where EV pilots and some charging stations exist, coverage remains thin and largely confined to corporate campuses.

There is also the question of affordability. Electric vehicles remain significantly more expensive upfront than conventional internal combustion engine cars, in a country where average incomes are low, and access to consumer credit is limited. Without substantial subsidies, financing schemes, or cost reductions driven by local manufacturing, mass-market adoption is likely to remain elusive in the near term.

Nigeria’s EV ambitions are not new. In April 2021, the Nigerian Institute of Transport Technology in Zaria set up a project team to develop a locally made electric vehicle. In August 2022, the National Agency for Science and Engineering Infrastructure signed MOUs with Israeli and Japanese firms to commence EV assembly and manufacturing. Several local companies, including Innoson Vehicle Manufacturing, Jet Motor Company, SAGLEV, Spiro, NEV Motors, and the Electric Motor Vehicle Company, have since introduced electric or hybrid models, mostly targeting fleets and niche urban users.

The Energy Transition Plan, launched in 2022, outlines an ambitious target of a 100% transition to electric vehicles by 2060, with Lagos State aiming for 2050. However, analysts note that these timelines assume massive improvements in power generation, grid stability, and infrastructure investment that have yet to materialize.

International interest in Nigeria’s EV potential is also rising. In May 2025, China announced plans to establish EV factories and other manufacturing ventures in the country, reflecting a broader push to tap Nigeria’s market size and mineral resources. Proponents argue that such investments could help unlock local value addition, particularly if Nigeria develops its lithium and other critical mineral value chains.

While there has been growing interest, many experts caution that manufacturing capacity alone does not create a market. Without reliable electricity, widespread charging infrastructure, and supportive consumer policies, an EV plant risks becoming an export-oriented facility or a symbolic project disconnected from domestic realities.

Against this backdrop, Nigeria’s EV push only underscores its ambitious long-term vision, colliding with short-term structural constraints. Analysts have noted that for projects like this to succeed and become a catalyst for genuine transformation, Nigeria has to quickly fix its infrastructure deficits and the basics that electric mobility depends on.