India’s Digital Infrastructure Startups Embrace New US Trade Agreement
On Saturday, Indian digital infrastructure startups expressed optimism regarding the recently established trade framework with the United States, particularly for its inclusion of vital components related to artificial intelligence and data centers.
The Bharat Digital Infrastructure Association (BDIA), a leader in the sector, characterized the agreement as a pivotal inflection point for India’s aspirations in AI and digital infrastructure.
Abhishek Bhatt, a proponent of data sovereignty, remarked, “The acknowledgment of graphic processing units (GPUs) and digital infrastructure within this trade deal is a significant advancement. For the first time, AI compute infrastructure has been explicitly recognized in a bilateral accord between two prominent global economies, emphasizing its status as critical national infrastructure.”
Historically, exorbitant import duties ranging from 20% to 28% on enterprise GPU servers have substantially diminished India’s competitive edge on the global stage. This has resulted in GPU-as-a-service pricing that is nearly 40% more costly than similar hubs like Singapore and the UAE.
According to the association, any initiative aimed at rationalizing tariffs could potentially lower the expense of establishing GPU-ready data centers by approximately 14%, thereby unlocking extensive investments in AI infrastructure throughout the nation.
Currently, India generates nearly 19% of the world’s data, yet it hosts only 6% of global data center capacity and a mere 1.4% of the world’s installed enterprise GPUs.
BDIA stated, “This trade framework, combined with reported hyperscaler investments exceeding $80 billion by 2030, has the potential to bridge this gap and position India as a credible global AI compute hub.”
Nevertheless, the association cautioned that trade liberalization must not compromise digital sovereignty, national security, or the creation of domestic value.
“While access to GPUs is crucial, unrestricted access without sovereignty risks relegating India to a low-margin compute colony. AI models, which are trained on Indian data and processed in Indian data centers, must economically and strategically benefit India and its industry,” BDIA asserted.
Experts concerned about data security have outlined essential safeguards for implementing the agreement. These include:
- Reciprocity in standards and market access, ensuring that Indian certifications and services receive equivalent recognition in US markets;
- Preservation of national security protocols, including India’s Trusted Source Policy, the Digital Personal Data Protection Act, and telecommunications safeguards;
- Data sovereignty and value retention, asserting that AI-generated intelligence and intellectual property derived from Indian data should accrue to India;
- Regulatory autonomy, safeguarding India’s right to oversee digital platforms, data circulation, and strategic technologies.
BDIA called for immediate domestic policy measures, including a temporary zero import duty on enterprise GPUs, a dedicated Production-Linked Incentive (PLI) scheme for AI and data center infrastructure, the designation of data centers as infrastructure, accelerated depreciation for GPU assets, and regulatory clarity regarding cross-border GPU compute services.
“This agreement presents a formidable opportunity. The extent to which India transforms this moment into sustained leadership in AI will depend on the decisiveness of policy actions that follow diplomatic efforts,” BDIA concluded.
Source link: Tribuneindia.com.
