AI Generated Summary
- With global cloud and hyperscale companies expected to invest more than $80 billion in India by the end of the decade, the trade framework is being viewed as a catalyst that could help bridge this gap and position the country as a serious contender in global AI compute services.
- Startups and industry bodies working in AI and cloud infrastructure argue that the inclusion of high-end computing equipment marks a shift in how emerging technologies are viewed in international trade.
- For the first time, AI compute infrastructure has effectively been treated as a strategic asset within a bilateral trade arrangement between two major economies, a move that could have long-term implications for India’s technology landscape.
India’s fast-growing digital infrastructure ecosystem has reacted positively to the newly announced India–US trade framework, seeing it as a potential turning point for the country’s artificial intelligence and data centre ambitions. Industry voices say the agreement’s recognition of key AI hardware, particularly advanced computing components, could significantly lower costs and accelerate domestic capacity building.
Startups and industry bodies working in AI and cloud infrastructure argue that the inclusion of high-end computing equipment marks a shift in how emerging technologies are viewed in international trade. For the first time, AI compute infrastructure has effectively been treated as a strategic asset within a bilateral trade arrangement between two major economies, a move that could have long-term implications for India’s technology landscape.
One of the sector’s biggest challenges so far has been the steep import duties on enterprise-grade GPU servers, which currently range between 20 and 28 per cent. These levies have pushed up the cost of GPU-based services in India, making them substantially more expensive than in competing hubs such as Singapore or the UAE. Industry estimates suggest that rationalising duties could reduce the cost of setting up GPU-enabled data centres by around 14 per cent, potentially unlocking large-scale investments across the country.
The timing is also seen as favourable. While India generates close to one-fifth of the world’s data, it hosts only a small fraction of global data centre capacity and an even smaller share of installed enterprise GPUs. With global cloud and hyperscale companies expected to invest more than $80 billion in India by the end of the decade, the trade framework is being viewed as a catalyst that could help bridge this gap and position the country as a serious contender in global AI compute services.
At the same time, industry experts have warned against pursuing openness without safeguards. They argue that easier access to advanced hardware must go hand in hand with policies that protect data sovereignty, national security and domestic value creation. Without such measures, there is a risk that India could end up providing low-margin compute services while the real economic and strategic benefits flow elsewhere.
To avoid this, data policy specialists have outlined several conditions they believe should guide the implementation of the agreement. These include reciprocal recognition of standards and certifications, continued enforcement of national security and data protection laws, ensuring that intellectual property and insights derived from Indian data benefit the domestic economy, and preserving regulatory autonomy over digital platforms and data flows.
The industry has also called for swift domestic policy support to complement the diplomatic push. Suggestions include a temporary zero-duty regime for enterprise GPUs, production-linked incentives tailored to AI and data centre infrastructure, granting infrastructure status to data centres, faster depreciation for GPU assets and clearer rules governing cross-border compute services.
Industry leaders say the trade framework provides momentum, but its ultimate impact will depend on follow-through at home. The coming months, they argue, will determine whether India can convert this opportunity into lasting leadership in artificial intelligence and digital infrastructure.
