How can a GPU cloud (neocloud) enter India?
Last updated
Colocation is fastest: with liquid-cooled space ready, first GPUs can go live in weeks to a few months (our estimate). In our reading, CERT-In rules apply from day one, including 6-hour reporting of cyber incidents (since 2022). The 2047 tax exemption probably does not fit a GPU cloud that owns its GPUs; this is general information, not legal or tax advice.
Key facts
In our reading, CERT-In's directions, which name data centres and cloud providers, require cyber incidents to be reported within 6 hours and logs to be kept in India for 180 days.
As of Oct 2026 (in force since 28 Apr 2022). CERT-In
The DPDP Rules were notified in Nov 2025. Consent-manager provisions start on 13 Nov 2026 and most other duties on 13 May 2027.
As of Nov 2025. PIB / MeitY
India is in US Country Group A:5. A US licence is still needed for customers headquartered in, or owned from, China, Macau or another D:5 country, and the US suspension of its affiliates rule ends on 9 Nov 2026 unless extended.
As of Oct 2026 (BIS guidance of 31 May 2026). US BIS; Federal Register
In our reading, the 2047 data centre tax exemption (Income-tax Act 2025, Schedule IV, item 13C) applies only if the foreign company does not own or operate any of the data centre's physical infrastructure or resources and sells to users in India through an Indian reseller company. Parliament passed amendments on 10 Aug 2026; we could not confirm assent or rules.
As of Oct 2026 (amendments passed 10 Aug 2026). PRS Legislative Research / Lok Sabha
IndiaAI's reference on-demand rate for an 8-GPU H100 SXM instance is ₹153 (US$1.61) per GPU-hour. It is open only to eligible users (startups, researchers, academia and government), who can get up to 40% off.
As of 13 Mar 2026. IndiaAI / MeitY (Ready Reckoner)
General information, not legal or tax advice. Confirm each point with Indian counsel and a chartered accountant.
Rupee to dollar conversions use ₹95.25 per US$ (FBIL reference rate, 13 Oct 2026).
Terms used on this page (12)
- Neocloud
- A cloud company built mainly to rent out GPU compute for AI, as opposed to a general-purpose hyperscaler.
- Colocation
- Renting space, power and cooling in someone else's data centre for your own servers.
- Powered shell, white space
- A powered shell is a building with grid power but no fit-out. White space is the finished hall floor where racks stand.
- Energisation, sanctioned load
- Energisation is when the utility actually switches power on. Sanctioned load is the maximum power it has approved for the connection.
- ASN (AS number)
- Autonomous System Number: the identifier a network needs to exchange traffic directly with other networks.
- CERT-In
- India's national cyber-security agency. Its 2022 directions set incident-reporting and log-keeping rules.
- DPDP, significant data fiduciary
- The Digital Personal Data Protection Act 2023 and its 2025 Rules, India's privacy law. A significant data fiduciary is a large or sensitive data handler the government designates for extra duties.
- MeitY, empanelment, STQC
- MeitY is the Ministry of Electronics and IT. Empanelment is its approved list of cloud providers for government work, after an audit by STQC, its testing body.
- IFSC, GIFT City
- The International Financial Services Centre at GIFT City, Gandhinagar, which has its own tax and regulatory regime.
- Lakh, crore
- 1 lakh is 100,000 and 1 crore is 10 million. ₹1 lakh crore is ₹1 trillion, about US$10.5bn at ₹95.25 per US$.
- Capex
- Capital expenditure: money spent on buildings and equipment, as opposed to running costs.
- Country Group A:5, D:5
- Groups of countries in the US export rules. India is in Group A:5 and in no D group. A US licence for advanced AI chips is needed for customers headquartered in China, Macau or another D:5 country.
Entry models, rules, prices and a checklist
India is open to foreign GPU clouds. The hard parts are a power-ready, liquid-cooled hall, the compliance set-up, and pricing against a subsidised government benchmark.
This is a practical overview, not legal or tax advice. Confirm each point with Indian counsel and a chartered accountant.
What this means for a GPU cloud
Start in colocation with energised, liquid-cooled space, keep Indian personal data in India from day one, screen every customer for US export rules, and do not build your plan around the 2047 tax exemption if you will own your GPUs in India.
Ways to enter
| Entry model | What it is | Time to first GPUs live (our estimate) | Commitment | Best for | Main risks |
|---|---|---|---|---|---|
| Colocation in an existing DC | Lease racks, a cage or a suite from an Indian operator | Weeks to a few months, if liquid-cooled high-density space exists | Low capex; 3 to 5 year terms are common (our estimate) | First footprint, inference, proving demand | Scarce 100 kW+ per rack space; slower expansion |
| Powered shell | Operator delivers a building with grid power; you fit out cooling and white space | About 6 to 12 months after handover | Fit-out capex plus a shell lease | Custom liquid or immersion cooling at moderate scale | Fit-out execution; local contractor depth |
| Build-to-suit | Developer builds a hall or building to your spec on a long lease | About 18 to 30 months | Long lease, often 10 to 15 years (our estimate) | Large committed training clusters | Commitment before demand is proven; grid delays |
| Partner or consortium with an Indian operator or telco | Revenue share, white label, JV or joint bid | Fast, if the partner has capacity | Low to medium; margin shared | Government and regulated customers without your own empanelment | Dependency; customer ownership terms |
| GIFT City (IFSC) unit | Set up in the international financial services centre at Gandhinagar | Depends on local capacity, which is small | IFSC registration | Serving IFSC banks, funds and fintechs | Whether a GPU cloud qualifies as an IFSC unit is not confirmed |
| Export cloud using Indian DC services (2047 tax exemption) | A foreign company serves customers using data centre services bought from a data centre run by an Indian company | As per the underlying DC | Two-entity structure | Global AI firms exporting compute from India | The foreign company must not own or operate any of the DC's physical infrastructure or resources; Indian sales go through an Indian reseller; Aug 2026 amendments not confirmed in force |
Timelines and lease terms are FlexiCloud planning estimates, not sourced statistics. Tax route conditions from the Income-tax Act 2025, Schedule IV item 13C (added by the Finance Act 2026), as amended by the Taxation and Other Laws (Amendment) Bill 2026, passed by Parliament on 10 Aug 2026.
Rules that apply to a GPU cloud
| Rule | What it requires | Applies to you? | Status |
|---|---|---|---|
| CERT-In (India's national cyber-security agency) directions | Report cyber incidents within 6 hours; keep logs for 180 days in India; sync clocks to Indian time servers; keep verified customer records for 5 years | In our reading, yes: the directions name data centres and cloud providers | In force since 2022 |
| DPDP (Digital Personal Data Protection) Act and Rules | Notices, consent, breach reporting, answer requests within 90 days; possible localisation for significant data fiduciaries | Yes: as a processor through contracts, and for your own customer and staff data | Rules notified Nov 2025; consent-manager provisions from 13 Nov 2026; most other duties from 13 May 2027 |
| RBI payment data | Payment data stored only in India | If you serve payments customers | Since 6 Apr 2018 |
| SEBI cloud framework | Data stays in India; only MeitY-empanelled, STQC-audited cloud providers | If you serve brokers, fund houses or exchanges | Since 6 Mar 2023 |
| MeitY cloud empanelment | STQC audit of your offering and Indian data centres | Needed for government and SEBI-regulated work | Ongoing; current round not checked |
| Telecom authorisation | Needed to sell connectivity | In our reading, not for selling compute alone; confirm with Indian telecom counsel | New rules dated 23 Jun 2026 |
| US export controls | Licence for customers headquartered in, or owned from, China, Macau or other D:5 countries; end-use, end-user and Entity List checks always apply | Yes: screen every customer's ultimate parent, end use and end user | BIS guidance 31 May 2026; India itself is in Country Group A:5 |
| Foreign investment | Generally permitted under the automatic route, except where Press Note 3 applies: government approval if a beneficial owner is in a country bordering India | Yes, at set-up | Press Note 3 of 2020 (confirm the sector entry with Indian counsel) |
IndiaAI reference GPU prices (on-demand)
| Instance | ₹ per GPU-hour | US$ per GPU-hour |
|---|---|---|
| H100 SXM, 8 GPUs | 153.00 | 1.61 |
| H200 SXM, 8 GPUs | 140.63 | 1.48 |
| B200 SXM, 8 GPUs | 323.00 | 3.39 |
| A100 80GB, 8 GPUs | 135.90 | 1.43 |
| MI300X, 8 GPUs | 177.07 | 1.86 |
| L40S, 1 GPU | 67.50 | 0.71 |
IndiaAI Ready Reckoner, rates dated 13 Mar 2026; available only to eligible users of the IndiaAI portal (startups, researchers, academia, government). Eligible users can get up to 40% off. As of 2 Sep 2026, 14 empanelled bidders offered 45,081 accelerators. These rates anchor price expectations for the subsidised segment.
State incentives we verified
| State | Policy | Who qualifies | Main incentives |
|---|---|---|---|
| Tamil Nadu | Data Centre Policy 2021 (G.O. 33, 23 Nov 2021) | ₹500 crore (US$52.5m) or more of fixed assets; at least 30% renewable energy for power incentives | Industrial power tariff; 5-year electricity tax waiver; concessional open access; dual grid at 50 MW or more; single window |
| Uttar Pradesh: parks | Data Centre Policy 2026 (notified 9 Jul 2026) | Parks of 40 MW or more | 60% interest subsidy for 7 years (up to ₹50 crore); land subsidy 25 to 50%; stamp duty waiver; wheeling waivers of 50 to 100% for 25 years; extra support for GPU-heavy sites |
| Uttar Pradesh: units | Same policy | Units of 2 to 40 MW; edge networks | 7% capital subsidy (up to ₹20 crore); 10-year electricity duty exemption; extra support for GPU-heavy sites |
| Maharashtra, Telangana, Andhra Pradesh, Karnataka, Gujarat | Dedicated DC or IT policies | Varies | Not re-verified for this update; check the current policy before investing |
Eleven states had data centre policies in force as of Sep 2026 (Cushman & Wakefield / Invest India). Incentives usually need approval before you invest. Power tariffs and categories by state are on the power, build and rent costs page. This is general information, not legal advice.
Checklist before you commit
| # | Check | Why it matters |
|---|---|---|
| 1 | Pick the structure: Indian subsidiary, or offshore parent plus Indian reseller | Decides GST registration, tax and contracting |
| 2 | Screen investors under Press Note 3 | Investors from bordering countries need government approval |
| 3 | Screen customers for US export rules | Any customer owned from China, Macau or another D:5 country needs a licence |
| 4 | Plan imports: HSN codes, IGST and input tax credit (rates typical; confirm with your CA), customs broker | GPUs stuck at customs cost money every day |
| 5 | Site check: kW per rack, liquid cooling, dual grid, energisation date in writing | Air-cooled halls cannot host Blackwell-class racks |
| 6 | Power: tariff category, green open access, group captive | Energy is the biggest running cost |
| 7 | Apply for state incentives before investing | Most need prior approval and minimum investment |
| 8 | CERT-In readiness: 6-hour reporting, logs in India, customer KYC | Applies to you directly |
| 9 | DPDP readiness: data processing agreements, breach runbook | Customers will pass these duties to you |
| 10 | Decide on MeitY empanelment or a partner | Required for government and SEBI-regulated customers |
| 11 | Decide your IndiaAI stance: bid, partner or stay out | IndiaAI prices set expectations for startups and academia |
| 12 | Connectivity: neutral site, two carriers, two exchanges, own ASN | In our reading, compute needs no telecom licence; selling bandwidth does |
| 13 | Billing: GSTIN, GST invoices (18% is typical for cloud services; confirm with your CA), e-invoicing, TDS, INR price list | Indian buyers expect INR GST invoices |
| 14 | People: local NOC, remote hands, named compliance owners | Liquid cooling and fabric skills are scarce |
For checks 5, 6 and 12, see operators and live capacity, power, build and rent costs and connectivity and latency; for cable route diversity, see subsea cables.
Common mistakes
- Assuming an air-cooled hall can host 100 kW+ racks.
- Trusting a grid energisation date that is not in the contract.
- Pricing in US$ when Indian buyers need INR invoices with GST.
- Ignoring the IndiaAI price anchor when selling to startups and academia.
- One carrier, one route, one on-ramp.
The 2047 tax exemption probably does not fit a neocloud that owns its GPUs in India
The Finance Act 2026 put it in the Income-tax Act 2025 (Schedule IV, item 13C). An amending Bill passed by Parliament on 10 Aug 2026 drops the notification steps and lets the Indian company lease the data centre; we could not confirm assent or the rules. Take advice from an Indian chartered accountant or tax counsel. To qualify, the foreign company must:
- not own or operate any of the data centre's physical infrastructure or resources
- sell to users in India only through a reseller that is an Indian company
- buy its data centre services from a data centre run by an Indian company
Export controls can change fast
As of October 2026, exports of advanced NVIDIA GPUs to most Indian customers generally do not need a US licence, subject to end-use, end-user and ownership screening. The US suspension of its affiliates rule ends on 9 Nov 2026 unless extended, which could tighten ownership screening. Confirm with US export-control counsel before each order.
Want this checked for your own site, power contract or launch plan? See DC advisory.
Sources for this section (16)
- Ministry of Finance. Budget 2026-27 speech, paras 130-131. 1 Feb 2026
- Ministry of Finance. Finance Bill 2026, Schedule IV item 13C. 1 Feb 2026
- Lok Sabha (via PRS). Taxation and Other Laws (Amendment) Bill 2026, Bill No. 150 of 2026, with extract of Schedule IV item 13C as in force. 4 Aug 2026
- PRS Legislative Research. Taxation and Other Laws (Amendment) Bill 2026: passed Lok Sabha 6 Aug, Rajya Sabha 10 Aug 2026. 10 Aug 2026
- CERT-In. Directions under section 70B(6) of the IT Act. 28 Apr 2022
- PIB / MeitY. Government notifies DPDP Rules. 14 Nov 2025
- RBI. Storage of payment system data. 6 Apr 2018
- SEBI. Framework for adoption of cloud services by SEBI regulated entities. 6 Mar 2023
- US BIS. Guidance on licence requirements for entities headquartered in D:5 and Macau. 31 May 2026
- Federal Register / BIS. Enhanced favorable treatment for the UAE under the EAR (91 FR 43034). 14 Jul 2026
- Federal Register / BIS. One-year suspension of the affiliates rule. 12 Nov 2025
- IndiaAI / MeitY. Ready Reckoner for compute users. 13 Mar 2026
- IndiaAI / MeitY. Empanelled GPUs. 2 Sept 2026
- Government of Tamil Nadu. Tamil Nadu Data Centre Policy 2021. 23 Nov 2021
- Invest UP. Uttar Pradesh Data Centre Policy 2026. 9 Jul 2026
- PIB. Review of FDI policy (Press Note 3 of 2020). 18 Apr 2020
Neocloud entry guide
Frequently asked questions
Colocation: lease racks, a cage or a suite in an existing Indian data centre. If liquid-cooled, high-density space is available, first GPUs can be live in weeks to a few months, against about 6 to 12 months after handover for a powered shell and about 18 to 30 months for build-to-suit (FlexiCloud estimates, Oct 2026). The catch is that space for 100 kW+ racks is scarce, so get the grid energisation date in writing.
In our reading, CERT-In's 2022 directions apply from day one: report incidents within 6 hours, keep logs in India for 180 days and keep verified customer records for 5 years. The DPDP Rules, notified in Nov 2025, bring consent-manager provisions from 13 Nov 2026 and most other duties from 13 May 2027. Serving payments firms means keeping their payment data in India (RBI, since 2018); SEBI-regulated firms need their data kept in India (since 2023), and SEBI work also needs MeitY empanelment. This is general information, not legal advice; confirm each point with Indian counsel.
Generally no, as of October 2026: India is in US Country Group A:5, so most Indian customers need no US licence for advanced NVIDIA GPUs. A licence is needed for any customer headquartered in, or ultimately owned from, China, Macau or another D:5 country (BIS guidance, 31 May 2026), and end-use, end-user and Entity List checks always apply. The US suspension of its affiliates rule ends on 9 Nov 2026 unless extended, which could tighten ownership screening. This is general information, not legal advice; confirm with US export-control counsel before each order.
Probably not. The exemption (Income-tax Act 2025, Schedule IV, item 13C, added by the Finance Act 2026) requires the foreign company not to own or operate any of the data centre's physical infrastructure or resources, to sell to users in India only through an Indian reseller company, and to buy its data centre services from a data centre run by an Indian company. Parliament passed amendments on 10 Aug 2026, but as of Oct 2026 we could not confirm assent or the rules. This is general information, not tax or legal advice; confirm with an Indian chartered accountant or tax counsel.
IndiaAI's reference on-demand rates (13 Mar 2026) on 8-GPU SXM instances are ₹153 (US$1.61) per GPU-hour for H100, ₹140.63 (US$1.48) for H200 and ₹323 (US$3.39) for B200. Only eligible users (startups, researchers, academia and government) can use them, and they can get up to 40% off. As of 2 Sep 2026, 14 empanelled bidders offered 45,081 accelerators, and these rates set price expectations for startups and academia. Decide early whether to bid, partner or stay out.
Eleven states had data centre policies in force as of Sep 2026 (Cushman & Wakefield / Invest India). We verified two: Tamil Nadu's 2021 policy offers an industrial power tariff and a 5-year electricity tax waiver for ₹500 crore (US$52.5m) or more of fixed assets, with at least 30% renewable energy for the power incentives, and Uttar Pradesh's 2026 policy (notified 9 Jul 2026) offers units of 2 to 40 MW a 7% capital subsidy of up to ₹20 crore. Most incentives need approval before you invest, so apply first and check the current policy in other states. This is general information, not legal advice.
FlexiCloud DC advisory
Entering India? We help GPU clouds go from first question to racked GPUs
FlexiCloud sources dedicated NVIDIA GPU nodes across more than 10 partner providers in India, the EU and the US. That puts us in regular contact with Indian data centre operators, carriers and GPU buyers.
We use that network to help neoclouds, AI labs and cloud providers enter India with fewer surprises: the right site, power you can count on, a clear compliance path and customers to talk to.
Who this is for
GPU cloud companies, AI labs and cloud providers planning anything from a few racks to tens of MW in India.
What we help with
Site and DC partner selection
Shortlist campuses by city, rack density, liquid cooling, energisation date and carrier neutrality; arrange site visits; run the RFP
You getA comparison of offers on the terms that matter for GPUs, not just price per kW
Power and connectivity
Check sanctioned load and energisation evidence, tariff category and green power options; map carriers, exchanges, cloud on-ramps and subsea path diversity; collect cross-connect quotes
You getA power and network plan you can put into the contract
Regulatory and compliance path
Map entity structure, foreign investment, CERT-In, DPDP, MeitY empanelment, telecom and US export-control screening, and the 2047 data centre tax route, working with your Indian legal and tax advisers
You getA compliance checklist with owners and dates, for your Indian counsel to confirm
GPU supply
Source B200, B300 and other NVIDIA nodes through our provider network, including interim capacity while your own build comes online
You getCapacity on a timeline that matches your launch
Introductions to Indian customers
Introduce you to AI startups, enterprises and labs in our network that are looking for GPU capacity
You getWarm conversations with buyers. Introductions, not guaranteed demand
Commercial terms review
Review colocation, power and carrier offers for the terms that bite later: ramp schedule, power pass-through, energisation penalties, SLA credits, expansion rights and exit
You getA list of terms to fix before you sign, for your counsel to finalise
How it works
- 01
Call
A short call to understand your workload, MW or GPU count, timeline and target customers
- 02
Brief
We agree scope and terms in writing before any work starts
- 03
Shortlist
Sites, power and network options, with site visits
- 04
Negotiate
Support on commercial and technical terms with operators and carriers
- 05
Launch
Help with GPU supply, compliance set-up and first customer introductions
What to expect from us
- We do not own data centres, so we have no site of our own to sell you.
- How we are paid: GPU providers in our network pay us a commission when we place capacity with them, and a data centre operator or carrier may pay us a referral fee. If any party we recommend will pay us, we tell you in writing before you sign.
- We are not a law firm or tax adviser; we work alongside yours.
- We will tell you when a site, a timeline or a price does not hold up.
Planning capacity in India?
Tell us your GPU count or MW, preferred cities and timeline. We will come back with a first view of options.
More from the India data centre guide
Power, build and rent costs
Grid power in India is mid-priced, building is cheap and colocation rent is low by global standards. See FY2026-27 state power tariffs, build cost per MW and city colocation rents, set against Singapore, Europe, the US and other Asian markets.
Subsea cables
About 15 international cables are live in India, mainly landing in Mumbai and Chennai, and 5 more are planned (Oct 2026). See every live and upcoming cable, landing stations by city, repair times and what it means for choosing a data centre site.
Connectivity and latency
Where India's networks meet, what an internet exchange port costs, which buildings host AWS, Azure, Google Cloud and Oracle on-ramps, and typical latency between cities. Mumbai leads: DE-CIX had 451 networks there on 14 Oct 2026.
Capacity is being built. Choosing where to run still matters.
More supply means more choice of site, region and provider, not less need for someone to help you pick. Whether you are planning your own capacity in India or need GPUs now, we deal with the operators and providers so you do not have to.
GPU capacity
Need B300 or B200 capacity?
Tell us your GPU count, term and region. We source the best-fit nodes across our provider network in India, the EU and the US, and confirm availability and lead time for your region before you order.