Shares of E2E Networks jumped 10% to reach the session's peak of ₹2,526 following Finance Minister Nirmala Sitharaman's announcement of a major push for data centres in her Budget 2026 speech. According to Upstox, the rally came after Sitharaman announced significant tax incentives for foreign companies operating data centres in India. The stock's strong performance reflects investor confidence in the government's commitment to boosting India's digital infrastructure sector. Other data centre and AI companies also gained significantly, with Anant Raj rallying 7.43% to an intraday high of ₹570.55 and Netweb Technologies declining 5.29% to ₹3,130.90. However, latest market developments show that benchmark indices NSE and BSE fell sharply over 1% as the Budget speech concluded, with the Sensex tumbling over 1,000 points and the Nifty slipping below the 25,000 mark as investors digested the fiscal announcements.
In her Budget 2026 speech, Sitharaman announced that the government proposes to offer a tax holiday until 2047 for foreign companies that provide cloud services globally using data centre infrastructure based in India. As reported by Upstox, such companies will be required to serve Indian customers through an Indian reseller entity as part of the conditions for the tax benefits. Additionally, the Finance Minister proposed a safe harbour of 15% on cost in case the company providing data centre services from India is a related entity. The proposal is being positioned as a step towards strengthening the digital services ecosystem and supporting the growth of local data storage and processing capabilities. The latest Budget announcement includes strategic tax frameworks to establish India as the Data Capital of the World, with any foreign company providing global cloud services using Indian Data Centers enjoying the comprehensive tax holiday. Industry stakeholders have welcomed this move, with TeamLease Services noting that the automated, rule-based mechanism for Safe Harbour approval enhances ease of doing business and provides certainty in taxation for the industry.
The announcement was made on February 1, 2026, as the Finance Minister presented her ninth consecutive Union Budget. According to Upstox, Sitharaman stated that the proposal recognises the need to enable critical infrastructure and boost investment in data centres. The data centre push represents a significant policy initiative aimed at attracting foreign investment in India's digital infrastructure sector. The Budget 2026 presentation marked a historic milestone as Sitharaman became the first Finance Minister to present nine consecutive Budgets, surpassing former Finance Minister P. Chidambaram's record. The presentation was conducted in the Lok Sabha with the Union Cabinet having approved the proposals beforehand, with the Finance Minister carrying her signature 'bahi-khata' and accompanied by Minister of State Pankaj Chaudhary and other Finance Ministry officials.
The Budget announcement had positive implications across the entire IT sector, with leading IT companies gaining between 1.2% and 2.5% after the Budget announcement. As reported by Upstox, Persistent Systems gained up to 2.5% to hit a high of ₹6,189.5, while Coforge advanced 1.71% to touch an intraday high of ₹1,682.4. TCS climbed 2.19% to an intraday high of ₹3,193, Infosys rose 1.27% to ₹3,193, and Wipro gained 2.04%. Companies engaged in providing energy, hardware and infrastructure solutions for data centres also gained following the Budget 2026 announcement. The latest Budget 2026 includes major boosts for IT sector leadership, with India's Information Technology Services consolidated under a single category and the government assisting the Indian Institute of Creative Technologies, Mumbai, in establishing AVGC content creator labs in 15,000 secondary schools and 500 colleges nationwide.
Industry experts have welcomed the Budget 2026 announcements as significant for India's digital infrastructure development. According to Upstox, S Anjani Kumar, Partner at Deloitte India, noted that the tax holiday and safe-harbour regime for global and domestic cloud providers using data centres in India signals a bet on India as a long-term compute hub. Ajay Kumar Srivastava, MD & CEO of Indian Overseas Bank, stated that initiatives like tax incentives for data centres and cloud services provide new avenues for inclusive financing and investment facilitation. As per Morgan Stanley report, the FY27 Budget supported economic growth through three main segments, with one focusing on the services sector through steps such as higher safe harbour thresholds, tax holiday for data centres, and a target to reach a 10% share of global exports by 2047. The report added that the long-dated 20-year tax holidays (to 2047) and safe-harbour margins for India-based data centres should support hyperscalers, infra platforms, and digital ecosystems.
