US Trade Deal Set to Boost India’s AI Hardware and Computing Infrastructure

New Delhi: The completion of the initial phase of the India–US trade agreement is expected to provide a significant push to India’s artificial intelligence (AI) hardware sector, particularly in advanced computing components. The deal is likely to reduce costs and strengthen domestic production capabilities.

According to an article published by the Khalsa Vox news portal, AI computing infrastructure has, for the first time, been recognised as a strategic resource within a bilateral trade agreement between two major global economies. This development could have far-reaching effects on India’s technology and digital ecosystem.

One of the major hurdles faced by the sector has been the high import duties on enterprise-grade GPU servers, which currently range between 20 and 28 per cent. These tariffs have increased the cost of GPU-driven services in India, making them considerably more expensive compared to technology hubs such as Singapore and the UAE.

Industry assessments indicate that reducing these duties could lower the cost of establishing GPU-powered data centres by nearly 14 per cent. Such a reduction could attract substantial investments and accelerate infrastructure growth across the country.

The agreement also comes at an opportune time. Although India generates nearly 20 per cent of the world’s data, it accounts for only a limited share of global data centre infrastructure and an even smaller portion of installed enterprise-grade GPUs.

With global cloud and hyperscale technology companies projected to invest more than $80 billion in India by the end of this decade, the trade deal is being viewed as a potential catalyst that could help close this infrastructure gap and position India as a major player in global AI computing services.

However, industry experts have emphasised the importance of implementing safeguards alongside easier access to advanced technology. They stress that policies must ensure data sovereignty, national security, and domestic value addition. Without such protective measures, there is a risk that India could end up offering low-margin computing services while the broader economic and strategic advantages benefit other countries.

With inputs from IANS