Budget 2026: Microsoft’s Puneet Chandok welcomes push on AI, cloud and data centres

The Union Budget 2026 has set a clear direction for India’s next phase of growth by placing artificial intelligence and digital infrastructure firmly at the centre of the country’s economic agenda, said Puneet Chandok, President, Microsoft India & South Asia.

“The Union Budget 2026 sets a clear direction for India’s next phase of growth, with AI, digital infrastructure, and services positioned as central to national progress. By placing AI at the heart of economic and governance priorities, the Government has signalled its commitment to building a more productive, competitive, and technology-led economy,” Chandok said.

He also highlighted the Budget’s emphasis on cloud and compute capacity, calling it a recognition of digital infrastructure as strategic national infrastructure.

“The Budget’s focus on data centres, cloud and AI infrastructure is equally significant. Long-term policy certainty recognises that digital infrastructure is now strategic national infrastructure. As AI adoption accelerates across sectors, secure and resilient compute capacity will underpin public services, enterprise innovation, and long-term competitiveness,” he added.

Presenting the Union Budget in Parliament on February 1, Finance Minister Nirmala Sitharaman announced a series of measures aimed at scaling India’s digital backbone, including incentives to attract global cloud providers to build infrastructure in the country.

“Recognising the need to enable critical infrastructure and boost investment in data centres, I propose to provide tax holiday till 2047 to any foreign company that provides cloud services to customers globally by using data centre services from India,” Sitharaman said in her Budget speech. She also announced a safe harbour framework for multinational structures, adding, “I also propose to provide a safe harbour of 15 percent on cost in case the company providing data centre services from India is a related entity.”

Chandok said Microsoft’s India strategy closely aligns with the government’s priorities outlined in the Budget.

“At Microsoft, our commitments in India closely align with this direction. We are expanding hyperscale cloud and AI infrastructure, including new regions, while continuing to invest in skilling at scale. Our efforts aim to support India’s transition from Digital Public Infrastructure to AI Public Infrastructure, enabling trusted, inclusive innovation with impact across the country,” he said.

The comments come against the backdrop of Microsoft’s largest-ever investment in India. In December 2025, the company announced a $17.5 billion investment over four years (calendar years 2026 to 2029) to advance cloud and artificial intelligence infrastructure, skilling initiatives and ongoing operations in the country. This builds on a $3 billion commitment announced in January 2025, which Microsoft has said it is on track to fully deploy by the end of 2026.