Daijiworld Media Network - New Delhi
New Delhi, Feb 8: The conclusion of the first phase of the India–US trade agreement is being seen as a major boost for India’s artificial intelligence ecosystem, particularly in the area of advanced computing hardware. The deal is expected to ease costs, improve access to critical components and support the development of domestic AI infrastructure.
For the first time, AI compute infrastructure has been recognised as a strategic asset within a bilateral trade framework between two major economies. This marks a significant shift that could have lasting implications for India’s technology and digital services landscape, according to an article published by the Khalsa Vox news portal.
A key hurdle for the sector so far has been high import duties on enterprise-grade GPU servers, which currently attract tariffs ranging from 20 to 28 per cent. These duties have inflated the cost of GPU-driven services in India, making them far more expensive compared to regional competitors such as Singapore and the UAE.
Industry assessments indicate that a rationalisation of these duties could lower the cost of setting up GPU-enabled data centres by nearly 14 per cent. Such a reduction is expected to unlock fresh investments and accelerate the expansion of AI-focused infrastructure across the country.
The timing of the agreement is also considered crucial. Although India generates nearly 20 per cent of the world’s data, it accounts for only a limited share of global data centre capacity and an even smaller proportion of installed enterprise-level GPUs.
With global cloud providers and hyperscalers projected to invest over $80 billion in India by the end of the decade, the evolving trade framework is being viewed as a catalyst that could help narrow this gap. Analysts believe it could strengthen India’s position as a competitive hub for global AI compute services.
However, the article notes that industry experts have also flagged the need for strong safeguards. Easier access to advanced hardware, they argue, must be accompanied by clear policies on data sovereignty, national security and domestic value creation. Without these protections, there is a risk that India could be confined to offering low-margin computing services, while the larger economic and strategic gains accrue elsewhere.