Data center deals stall in India as US tech firms pause leases

Major American technology firms are putting the brakes on plans to rent massive data centers in India as relations between Washington and New Delhi hit rough waters over trade ￰0￱ Tech orders for enormous computing facilities remain under consideration, but companies are taking their time before making final commitments, according to Alok Bajpai, who leads India operations for NTT Global Data Centers. “They are holding the pen and saying let me not sign it just yet,” Bajpai noted. Large-scale computing facilities from companies like Amazon, Microsoft and Google make up roughly 30% of data center demand across India right ￰1￱ consulting firm Anarock Capital expects this figure to climb to 35% in coming ￰2￱ data center agreements have been stuck in limbo for more than two months, said an industry consultant who requested anonymity because of business ￰3￱ same source indicated these tech giants might reconsider their strategies within three to six ￰4￱ between Washington and New Delhi deteriorated sharply over the past two ￰5￱ United States first slapped a 25% duty on Indian goods this past August, then doubled down by raising that figure to 50%.

American officials cited India’s decision to buy Russian oil as justification for the ￰6￱ and cloud demand still growing in India Washington followed up with another blow in ￰7￱ Donald Trump announced a new $100,000 fee for fresh H-1B visa applications . “The new ￰8￱ on Indian exports have unsettled global supply chains and made equipment and input costs harder to pin down,” explained Jitendra Soni, a partner at law firm Argus Partners specializing in technology ￰9￱ added , as quoted by CNBC, that contract negotiations now routinely include “clauses for tariff pass-throughs, change in law, and phased capacity.” Industry watchers predict India’s data center capacity will nearly triple over five years, jumping from 1.2 gigawatts to more than 3.5 gigawatts by 2030, even with current ￰10￱ has been climbing thanks to lower operating costs and increasing needs for online shopping services, cloud systems and artificial intelligence ￰11￱ a shortage of graphics processing units (GPUs) had already put a damper on expansion plans before trade friction added another complication.

“Hyperscalers haven’t vanished, but have just hit a pause,” the consultant ￰12￱ has been in discussions with officials in Andhra Pradesh state about building a 1-gigawatt facility, while OpenAI is searching for partners on a comparable project , according to reports. “India’s underlying appeal has not dimmed and remains compelling,” Soni stated. “But deals are now closing more slowly, and with far more lawyering around who bears the next global shock.” India GDP growth beats forecasts at 7.8% Despite facing tough American tariffs, India has two things working in its ￰13￱ than anticipated economic expansion and rising spending by consumers at home, analysts ￰14￱ Sachs bumped up its growth outlook for India by 60 basis points in September, forecasting 7.1% for calendar year 2025 and 6.7% for fiscal year ￰15￱ revision accounts for negative effects from American ￰16￱ production, building projects and service industries pushed growth higher, while inflation came in lower than expected, also helping the real growth rate.

“Lower inflationary pressures, the impending adjustment of the GST slabs to allow for greater spending and the ongoing festive season through to Diwali in October will keep private consumption supported,” OCBC Global Markets Research said in a September 1 report. However, the firm maintained its forecast at an average 6% for fiscal year ￰17￱ World Bank projects 6.3% and the International Monetary Fund estimates 6.4% for that same ￰18￱ Minister Narendra Modi announced major goods and services tax changes on August ￰19￱ current system has four brackets at 5%, 12%, 18%, and 28%. Reuters reports the new structure will simplify things down to just two rates at 5% and 18%, shifting most items to lower ￰20￱ should encourage more ￰21￱ changes should take effect by Diwali in October, when shopping traditionally picks ￰22￱ smartest crypto minds already read our ￰23￱ in?

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