Union Budget 2026 – How does E2E Networks stand to gain?

Tax concession on cloud infra providers to drive a positive sentiment shift in India data centers theme

The Union Budget 2026 has proposed a tax holiday for any foreign company offering cloud services to global customers using data centre infrastructure in India. These companies will still be required to serve Indian customers through an Indian reseller entity. The move underscores the government’s intent to strengthen domestic digital infrastructure by attracting foreign investment into India’s cloud ecosystem, while also preserving data sovereignty.

E2E Networks, India’s only listed, homegrown GPU (Graphics Processing Unit) cloud platform, emerges as an indirect beneficiary of this policy shift. While the tax holiday is not directed at domestic cloud providers, the mandate to anchor hyperscale cloud capacity in India and the push for global cloud firms to focus on export-led workloads could enhance E2E’s relative competitiveness in the price-sensitive Indian cloud and AI-compute market.

Despite competition from AWS, Google Cloud, and Microsoft Azure, E2E has consistently competed on performance, customization, and cost efficiency. The increasing adoption of public‑private cloud, hybrid architectures, and multi-cloud strategies further positions E2E as a key enabler in India’s rapidly expanding AI compute environment.

As global cloud providers expand local data centre operations to take advantage of the tax incentive, E2E, which uses colocation and leased data centre facilities, stands to gain indirectly. The resulting improvements in unit economics (Rs/kW), faster deployment cycles, and deeper integration with India’s AI-data centre ecosystem could enhance E2E’s operating leverage and credibility.

Additionally, India’s rising sovereign AI compute requirements, the accelerating enterprise AI adoption, and stricter data-localisation norms - especially under the India AI Mission - are amplifying demand for domestic cloud infrastructure providers.

While competitive intensity from global hyperscalers may increase and exert pricing pressure, India’s AI/ML workload expansion remains robust. The policy announcement improves India’s attractiveness as a cloud base, boosts customer confidence in local compute availability, and could strengthen positive sentiment around domestic players like E2E Networks.