Khaberni - American technology companies are postponing their decisions related to leasing large data centers in India due to escalating trade relations between New Delhi and Washington.
Alok Bajpai, the managing director of NTT Global Data Centers in India, said that the requests from major technology companies to establish large data centers - centers that consume massive amounts of computing power - "are still under review, but they are hesitant to sign off on their construction at the current time."
According to CNBC, large data centers, including those of companies like Amazon, Microsoft, and Google, represent about 30% of the demand for data centers in India, and this percentage is expected to rise to 35% according to data from Anarock Capital's real estate consultancy.
A real estate consultant - who requested anonymity due to the sensitivity of his position - said that new data center deals have been on hold for over two months, while major companies may reassess their plans over the next three to six months.
He mentioned that tariff passage clauses, changes in laws, and phasing capacities have now become standard in negotiations.
Jitendra Soni, a partner at Argus Partners, said that trade relations between the two countries have seen notable tension in the past two months. In August, the United States imposed a 25% customs duty on goods coming from India, which was later raised to 50%, justifying this by India's purchase of Russian oil.
This was followed by the imposition of a new "one-time" visa fee of 100,000 dollars for new H-1B visa applications starting from September 21, a decision announced by US President Donald Trump, which is expected to have the greatest impact on Indian workers.
Soni, a partner in the technology and data privacy department at the same firm, added that the new US customs duties on Indian exports have destabilized global supply chains, making it difficult to precisely determine the costs of equipment and inputs.
Despite these challenges, various estimates in the sector indicate that the capacity of data centers in India is expected to almost triple over the next five years, rising from 1.2 gigawatts to more than 3.5 gigawatts by 2030, driven by lower costs and increased demand for e-commerce services, cloud infrastructure, and artificial intelligence workloads.
However, uncertainty now manifests in data center negotiations, where tariff passage clauses, changes in laws, and phasing capacities have become essential requirements, according to Soni.
The shortage of Graphics Processing Units (GPUs) has also slowed the pace of expansion, with recent trade disputes adding a new layer of caution to the investment landscape in this vital sector.
Among the companies showing interest in establishing large data centers in India are Google, which has held talks with the government of Andhra Pradesh to develop a 1 gigawatt facility, and OpenAI, which is looking for local partners for a similar project.
In conclusion, Soni said: "India has not lost its attractiveness to major technology companies and remains a promising market, but deal-making has become slower than before, with increasing legal debate about who will bear the brunt of the next global shock."
