Sun, 01 Feb 2026

Sun, 01 Feb 2026 Rare earths and data centres: India pushes local industry as global tensions rise

India's budget focuses on infrastructure and defence spending and tax breaks for data-centre investments.
1. Infrastructure spending: Capital expenditure target increased by 9% to ₹12.2tn (approximately $133.1bn) for the upcoming financial year. 2. Defence allocations: Defence outlays jumped over 20% in response to heightened geopolitical tensions globally. 3. Manufacturing push: Government proposes scaling up manufacturing in seven strategic sectors, including semiconductors, data centres, textiles, and rare earths. 4. Tax incentives: Tax holiday up to 2047 for foreign cloud companies making data-centre investments in India and providing cloud services to customers globally. 5. Fiscal discipline: Government aims to bring down the debt-to-GDP ratio from 56% to 50% by 2030-31, giving more flexibility to spend on higher capital expenditure. Additional measures:
* Dedicated corridors for rare earth minerals in four states
* Second semiconductor mission with an outlay of $436m
* Customs duty exemptions for inputs used to manufacture lithium-ion batteries
* Raising limits on duty-free inputs for industries such as seafood and garments No direct tax cuts on personal incomes: Government had raised income tax exemption limits last year, making earnings up to ₹1.2m entirely tax-free.
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