Cognizant executive: Tax break for global cloud companies that use Indian data centers can turn India into an AI hub

Tax Holiday for Cloud Firms Can Make India Global AI Hub: Cognizant CFO

The long-term tax holiday announced in the Union Budget for global cloud companies using Indian data centres could help position India as a global hub for artificial intelligence (AI) and digital services, Cognizant Chief Financial Officer Jatin Dalal said on Wednesday.

The government has offered a tax holiday until 2047 for foreign firms that provide cloud services to customers worldwide through data centres based in India. Dalal said the move could have “far-reaching consequences” for the country’s technology landscape.

“It provides an opportunity to make India a home for AI and services, a combined hub for the world in the next few years,” he said during Cognizant’s Q4 earnings briefing.

Dalal added that other Budget measures, such as merging various IT service segments under a single tax framework and expanding safe harbour limits, also support India’s long-term vision of becoming a global technology powerhouse. “As participants in the industry, we feel very encouraged by it,” he noted.

Cognizant CEO Ravi Kumar S also welcomed the proposal for an ‘AI Economic Council’, calling it a “brilliant idea”. He said technology transitions—from personal computers to the internet and now AI—have historically improved productivity and wages.

He pointed out that productivity growth has remained flat for nearly two decades and said AI presents a chance to improve efficiency and incomes for workers across sectors.

While acknowledging concerns about job losses due to automation, Kumar said new technologies typically create more jobs in the long run. He added that an economic council could help manage the transition and ensure AI enhances human potential rather than replacing it.

“Increasing productivity and wages is the best way to drive GDP growth without inflation,” he said.