The Centre is preparing a tax overhaul aimed at attracting global investors and strengthening India’s manufacturing ecosystem.
The proposed reforms are expected to benefit Big Tech, data centres, electronics, REITs, InvITs and foreign funds.
Highlights
- Government to introduce a new tax relief package to attract foreign capital.
- Big Tech companies could receive long-term tax holidays till FY41.
- Data centres, electronics manufacturing and global supply chains are among key focus sectors.
- Foreign companies providing specified data services may get tax exemptions till March 2047.
- Tax benefits are also proposed for rough diamond sales by foreign firms till March 2041.
- REITs and InvITs are expected to continue enjoying tax advantages under the proposed reforms.
The Centre is preparing a major tax reform package aimed at making India a more attractive destination for global investment. The proposals are expected to be included in the Taxation and Other Laws (Amendment) Bill, 2026, which is likely to be introduced during the upcoming Parliament session.
The government plans to offer long-term tax incentives to sectors that can generate large-scale investments and strengthen India’s position in global supply chains. Big technology companies, electronics manufacturers, contract manufacturers, data centres and logistics infrastructure are expected to be among the biggest beneficiaries.
As part of the proposed reforms, foreign companies providing specified data-related services may receive income tax exemptions until March 2047. The government is also considering a lease model for data centres, making it easier for foreign firms to collaborate with Indian partners while expanding their operations.
The proposals are designed to encourage global technology giants such as Apple and Google to increase manufacturing and supply-chain investments in India. Officials believe the measures will support India’s ambition of becoming a global electronics and semiconductor manufacturing hub.
The tax package also includes relief for foreign companies involved in the sale of rough diamonds, with exemptions proposed until March 2041. Existing tax benefits for Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) are expected to continue, providing greater certainty to long-term investors.
According to the report, the reforms are intended to improve India’s competitiveness in attracting foreign capital, simplify the tax framework and provide long-term policy stability. The government hopes these measures will accelerate investment inflows, create jobs, expand manufacturing capacity and reinforce India’s position as a preferred global investment destination.
