India eases compliance rules for foreign firms using local data centres

The Indian government introduced the Taxation and other laws (Amendment) Bill, 2026, in the Lok Sabha on Tuesday, proposing to ease compliance for foreign companies using Indian data centres by removing notification requirements. This aims to improve ease of doing business. The Bill reduces reporting requirements for foreign firms claiming the 20-year tax holiday announced in the FY27 Budget, which was designed to prevent their global income from being taxed in India. It also removes conditions requiring separate government notifications for both foreign cloud companies and Indian data centres. Additionally, the Bill permits Indian data centres to operate under a leased model rather than only direct ownership, expanding the ecosystem. This reform is expected to support the development of large "AI data cities" and attract significant investment.