India needs to ramp up AI investment; tax holiday a big opportunity: Nvidia

India needs to scale up investment in Artificial Intelligence from the current $1.2 billion to match the global levels and the Budget announcement of 20-year tax holiday to foreign companies offers "foundational infrastructure" for expanding AI, a senior Nvidia official said on Wednesday.

Shanker Trivedi, Senior Vice President, Enterprise Business at Nvidia, said of the 2,000 global corporations, 1,800 have a major global capability centre in India currently employing over 2 million people, shortly to grow to 3 million.

"Everyone of these global capability centres needs their own local AI factory from which they will take their data, their business processes, their IP, and convert it into intelligence. And, so, this (Budget announcement) is a very big opportunity here in India. And as we describe, this is foundational infrastructure," Trivedi said at the AI Impact Summit 2026.

 

In the Union Budget 2026-27, a tax holiday of 20 years up to 2047 was announced to any foreign company that procures data centre services in India, allaying fears of their global income being taxed by Indian authorities.

Irrespective of whether a global company sets up its own data centre in India or procures services from an Indian data centre, the tax treatment will be the same, thereby ensuring complete a level-playing field.

Talking about India's AI push, Trivedi said India's $1.2-billion investment into AI infrastructure in India is commendable and is being highly utilised.

"But to put it into context, the overall investment per year in core infrastructure in India is now of the order of $150 billion a year. And we need that infrastructure. We need the roads, bridges, railways, high speed train, airports, seaports, electricity grid, and of course, that goes into $150 billion a year.

"But the amount being invested at $1.2 billion for the AI mission is still insufficient to actually create that population scale AI and put India on the manufacturing map, on the services map, not just for India in India, but for India, into the world. So I hope that we will be able to, as the economy grows, put more investment into this AI infrastructure," Trivedi added.

Nvidia dominates GPU market -- chipsets, which are vital for development of AI ecosystem -- due to its fast-processing speed.

The Union Cabinet, chaired by Prime Minister Narendra Modi, had in March 2024 approved a comprehensive national-level IndiaAI mission with a Budget outlay of ₹10,371.92 crore.

The IndiaAI mission aims to establish a comprehensive ecosystem catalysing AI innovation through strategic programmes and partnerships across the public and private sectors.