India’s Union Budget 2026 has emphasized the strategic importance of data centres as the foundation for the country’s artificial intelligence ambitions. Data centres are now seen as central to digital transformation, supporting cloud computing, AI processing, and digital public services. This marks a significant shift, positioning infrastructure policy alongside India’s broader technological and economic goals.
A key focus is power and sustainability, as AI workloads require dense, high-performance computing with substantial energy consumption. Ensuring reliable access to competitively priced and sustainable energy sources, including renewables, is essential for scaling data centre capacity efficiently.
Alongside energy, regulatory clarity and data sovereignty are driving investment. Policies encouraging the localisation of data storage and processing make domestic infrastructure more attractive to both global and local businesses. Recognizing data centres as national infrastructure could further accelerate approvals, reduce costs, and boost investor confidence.
Despite progress, talent shortages remain a significant challenge. Operating AI-ready hyperscale data centres requires expertise in power systems, cooling technologies, cybersecurity, and infrastructure management. Budget 2026 provides an opportunity to invest in workforce development, ensuring India can capture a growing share of global AI-driven economic growth.
