Union Budget 2026 Triggers Debate as Adani and Ambani Benefit from Cloud Incentives

By Anuj Singhal

India’s Union Budget 2026–27 has triggered an industry-wide debate on cloud sovereignty and long-term value creation, as incentives for global cloud hyperscalers are expected to significantly benefit large domestic data centre operators. Under the Budget framework, foreign hyperscalers such as Amazon Web Services (AWS), Microsoft Azure, and Google Cloud will be eligible for long-term tax incentives extending up to 21 years provided their cloud workloads are hosted within Indian data centres. The policy is aimed at accelerating data localisation, digital infrastructure creation, and employment generation.

Big-Ticket Infra Moves Set the Context

The debate comes against the backdrop of major infrastructure announcements made ahead of the Budget. In October 2025, the Adani Group announced a $15 billion partnership with Google to build large-scale, AI-focused data centre infrastructure in India. This was followed in January 2026, when Reliance Jio announced a 3-gigawatt data centre project in Jamnagar, one of the largest planned facilities globally. Both groups are building massive capacity positioned to host global cloud giants such as AWS, Google Cloud, and Microsoft Azure, effectively becoming long-term infrastructure partners for hyperscalers seeking local hosting to comply with India’s policy and regulatory environment.

Concerns from Domestic Cloud Leaders

Industry veterans have cautioned that while the policy may deliver short-term infrastructure and employment benefits, it could have long-term structural implications. Manoj Dhanda, Founder of Utho Platforms, said the approach risks limiting India’s control over its digital future. “This policy will definitely create jobs and bring short-term benefits through data centre investments. But in the long run, India risks becoming only a reseller market — from email to AI, everything sold by foreign hyperscalers with limited control. Sovereignty, innovation, and future pricing power are real concerns.”

Hyperscaler-Aligned Viewpoints

On the other hand, technology industry bodies and multinational cloud players have defended the policy direction, stating publicly that long-term incentives are essential to attract capital-intensive investments and position India as a global hub for cloud and AI services. Proponents argue that hyperscaler-led growth strengthens the broader digital ecosystem, including startups, enterprises, and government platforms.

A Broader Policy Question

While the Budget underscores India’s ambition to become a digital and AI-driven economy, critics note the absence of comparable long-term incentives for domestic cloud providers and Indian SaaS infrastructure players many of whom are already investing without similar fiscal support. As AI workloads, government platforms, and enterprise systems increasingly migrate to the cloud, industry leaders say the policy debate is no longer just about infrastructure, but about ownership, pricing power, and who captures long-term value in India’s digital economy.

The Budget accelerates cloud infrastructure growth but it also raises a fundamental question: will India merely host global cloud platforms, or build sovereign digital capabilities it can own and export?