The India-US interim trade agreement will facilitate a 7-fold increase in the data centre market, said industry stakeholders.
On Saturday morning, the two countries announced a framework under which India will purchase up to $500 billion of US products over five years, that is expected to increase trade in technology products and GPUs used in data centres.
India has imported about 20,000-25,000 high-end GPUs worth around $2 billion in the last two years. Already, the market is slated for significant increase in these numbers, driven by market demand, AI use case maturity, tax holidays and various other tailwinds. The recent agreement will facilitate this growth in a big way, said Sunil Gupta, Founder, Yotta Data Services.
“At its core, India’s AI future will be shaped by one simple question: how quickly can the country access, deploy, and scale trusted compute at population scale. In that context, the U.S.–India technology trade framework is a meaningful positive,” said Gupta, adding that the agreement coupled with India’s budget direction signals a move from transactional technology imports to deeper, deployment-level collaborations.
An allocation of just 8–10 per cent of the purchase amount to technology products can translate to $40-50 billion over five years – much higher than India’s data center market valuation of $8.94 billion in 2025, said Piyush Prakashchandra Somani, Managing Director and Chairman of ESDS Software.
Further, reduced import barriers could spur earlier projections of India’s data centre GPU market reaching $11 billion by 2033. India’s share in the global market is currently around 5.5 per cent but could move to 10 per cent with the right policy support, translating to over $12 billion by 2032.
“Over the next five years, approximately 18-20 million enterprise GPUs will be deployed globally, representing a market value exceeding $1.3 trillion. India’s realistic target, with this trade framework as tailwind, is to capture 2.3 million GPUs, moving from 1.4 per cent to 10 per cent global share, jumping from seventh position to third position globally, only behind the US and China,” said Somani.
The Bharat Digital Infrastructure Association (BDIA) too welcomed the development as a strategic inflection point for India’s AI and digital infrastructure ambitions.
High import duties of 20–28 per cent on enterprise GPU servers made GPU-as-a-Service pricing nearly 40 per cent higher than peer hubs such as Singapore and the UAE.
As such, any move towards duty rationalisation can reduce the cost of setting up GPU-ready data centres by approximately 14 per cent, unlocking large-scale investments in AI infrastructure across the country.
India currently generates nearly 19 per cent of global data but hosts only 6 per cent of global data centre capacity and just 1.4 pr cent of the world’s installed enterprise GPUs. The trade framework along with hyperscaler investments exceeding $80 billion by 2030 will help bridge this gap.
However, BDIA cautioned that trade liberalisation must not come at the cost of digital sovereignty, national security, or indigenous value creation. It asked the government to consider equal market access and standards, national security frameworks, data sovereignty and value retention and regulatory autonomy, to protect India’s sovereign rights.
“Access to GPUs is important, but access without sovereignty risks turning India into a low-margin compute colony. AI models trained on Indian data, in Indian data centres, must economically and strategically benefit India & Indian Industry,” BDIA said.
The are pushing for temporary zero import duty on enterprise GPUs, a dedicated PLI scheme for AI and data centre infrastructure, accelerated depreciation for GPU assets, and regulatory clarity on cross-border GPU compute services.
Published on February 7, 2026
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