Budget 2026 boosts India's data centre ambition; MOFSL's Raamdeo Agrawal on FPI selling, rupee fall

Motilal Oswal Financial Services Ltd (MOFSL) Chairman and Co-founder Raamdeo Agrawal on Monday said the Union Budget 2026-27 has given a strong push to India's ambition of becoming a hub for data centres.

Commenting on the Budget's announcement of a tax holiday for data centres extending till 2047, Agrawal said the move signals the Centre's intent to attract global hyperscalers and large-scale investments into India.

"An absolute tax break for setting up data centres in India to cater to hyperscalers worldwide is an initiative worth appreciating. It shows the government's aggression -- once it is convinced about something, the pace at which it can move," he told Business Today.

"I think it will happen in the next four-five years. It will be very quick and it will add to the growth of the country," Agrawal added.

On concerns around sustained foreign portfolio investor (FPI) selling and the depreciation of the Indian rupee, Agrawal struck an optimistic note, stating that both trends are likely to reverse over time. "We have done agreements with I think 8-10 countries, including the EU (European Union), and many more are in the pipeline," he said.

Agrawal noted that FPIs are currently reassessing opportunities across emerging markets. "2026 has started with a bang for the emerging markets. And this entire move of 10-15 per cent has bypassed India. Otherwise, India used to be right at the forefront," he said.

He expects a catch-up as global and domestic uncertainties settle. "So, I think we will make it up in the course of time as these things get settled, hopefully in a few weeks or a few months. Till then, we have to be patient," he added.

On the domestic equity market outlook, Agrawal said, "Valuations have corrected, and in stock market terms, valuation is the most important factor. Currently, the market is trading at around 21.5 times the current year's EPS, and while we are close, there may still be some time or some further correction ahead."