India is racing to become a global hub for artificial intelligence infrastructure, offering tax breaks and incentives to attract U.S. tech giants like Google, Microsoft, and Amazon. The effort has encountered resistance from local communities, particularly farmers who say they are being excluded from decisions that affect their land.
Tax breaks and opaque land deals
The Indian government announced a 20-year tax holiday in February for foreign cloud service companies using data centers in the country to serve global customers. Officials present the policy as essential for economic growth and job creation.
The incentives lack transparency. Google’s $15 billion data center project in Andhra Pradesh has drawn criticism for its location in an agricultural area known for paddy fields and mango orchards. Activists say farmers were pressured into selling their land through unclear mechanisms.
The Human Rights Forum wrote in a blog post last October that the proposed sites were selected through opaque land-pooling and acquisition methods. The group also raised concerns about the government’s incentives for Google, including tax exemptions, land allocation, and reimbursements for water, power, and infrastructure valued at 22,002 crore Indian rupees over two decades.
Activists argue that such deals redirect public resources away from healthcare and education. The forum stated that corporate giveaways harm equitable development.
Farmers pushed aside, protests ignored
Microsoft and Amazon are also facing criticism. In Telangana, Microsoft’s data center has been accused of encroaching on land and improper waste disposal, though the company denies the claims. A spokesperson said Microsoft is cooperating with authorities and rejects the allegations.
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Arpita Kanjilal, who leads research at the Digital Empowerment Foundation, said farmers and local governance bodies were left out of land allocation decisions. She noted that public purpose laws rely on subsidies for private companies, with many hidden costs still unclear.
India’s land acquisition laws permit the government to seize private land for projects deemed to serve a public purpose, a category now extended to AI data centers. Critics say the process lacks protections. Indumugi C., a lawyer with the Internet Freedom Foundation, stated that the government views the issue as an investment opportunity rather than a political or economic concern.
The tech giants—Google, Microsoft, Amazon, and Meta—did not respond to inquiries about farmer pushback in India. Their lack of response highlights the gap between corporate goals and the communities affected by these projects.
As of 2025, the U.S. still hosts over half of the world’s hyperscale data centers, which require significant power and water. India’s effort to join this sector may depend on whether it can reconcile growth with the rights of displaced communities.
Protests persist even as construction begins.
While the country aims to expand its artificial intelligence capacity, the human cost remains a contentious issue.