New Delhi, February 8: The completion of the first phase of the trade deal between India and the United States is seen as a significant boost for India’s AI hardware sector. This agreement is expected to lower the costs of advanced computing-related equipment, aiding in the manufacturing and capacity enhancement within the country.
According to an article published on Khalsa Vox News Portal, this is the first time that AI computing infrastructure has been recognized as a strategic asset in a bilateral trade agreement between two major economies. This could have long-term implications for India’s technological future.
Historically, the biggest challenge for this sector has been the heavy import duties on GPU servers, which range from 20% to 28%. This has made GPU-based services expensive in India, rendering them less competitive compared to countries like Singapore or the UAE.
The article notes that industry estimates suggest that reducing these taxes could decrease the cost of establishing GPU-equipped data centers by approximately 14%. This could pave the way for substantial investments in the country.
The timing is favorable for India, as it generates about one-fifth of the world’s total data. However, the global data center capacity and the number of enterprise GPUs in India remain significantly low.
According to the article, major global cloud and tech companies could invest over $80 billion in India by the end of the decade. The trade deal is viewed as an opportunity for India to emerge as a strong contender in global AI computing services.
Experts have emphasized the need for caution. They argue that alongside easier access to advanced hardware, robust policies for data security, national security, and domestic value creation must also be established.
The article further warns that without such policies, India risks becoming a provider of low-margin computing services, while the real economic and strategic benefits could accrue to other countries.