Budget 2026 Fuels E2E Networks Rally with Data Centre Tax Incentives
In a significant boost to India's digital infrastructure sector, E2E Networks witnessed a remarkable surge in its share price during the trading session on February 1, 2026. The company's stock jumped by an impressive 10%, reaching a daily high of ₹2,334 per share. This sharp upward movement was directly triggered by announcements made by Union Finance Minister Nirmala Sitharaman during her presentation of the Union Budget 2026.
Finance Minister's Proposal for Data Centre Investments
The catalyst for this market excitement was a key proposal aimed at accelerating investment in critical digital infrastructure. In her budget speech, Finance Minister Sitharaman outlined a strategic initiative to provide a tax holiday until the year 2047 for foreign companies that offer cloud services globally by utilizing data centre services located within India.
"Recognising the need to enable critical infrastructure and boost investment in data centres, I propose to provide a tax holiday till 2047 to any foreign company that provides cloud services to customers globally by using data centre services from India," stated Sitharaman. She added an important condition: "It will, however, need to provide services to Indian customers through an Indian reseller entity."
Additional Safe Harbour Provision Announced
Further sweetening the deal for potential investors, the Finance Minister introduced an additional measure to provide clarity and certainty in transfer pricing. "I also propose to provide a safe harbour of 15 percent on cost in case the company providing data centre services from India is a related entity," she elaborated. This safe harbour rule is designed to simplify compliance and reduce disputes for multinational corporations establishing or expanding their data centre operations in the country.
Market Reaction and Sector Implications
The immediate beneficiary, E2E Networks, a prominent provider of cloud computing and data centre services in India, saw its valuation climb as investors reacted positively to the news. The budget proposals are seen as a major step towards:
- Attracting Foreign Direct Investment (FDI) into India's burgeoning data centre ecosystem.
- Positioning India as a global hub for cloud computing and data storage infrastructure.
- Boosting domestic companies like E2E Networks that provide the underlying infrastructure and services.
- Accelerating digital transformation across industries by making advanced computing resources more accessible and cost-effective.
This policy move aligns with the government's broader vision of a Digital India, where robust data infrastructure forms the backbone of economic growth and technological innovation. The long-term tax incentive, extending over two decades, provides a stable and predictable fiscal environment for large-scale, capital-intensive investments in data centres.
The announcement has set a positive tone for the technology and infrastructure sectors, with market analysts expecting further momentum as the details of the policy are implemented. E2E Networks' stock performance serves as an early indicator of the market's confidence in the government's strategy to make India a premier destination for global data infrastructure investments.
