The new incentives, along with a safe‑harbour rule to reduce tax disputes, aim to attract investment, boost onshore processing, and strengthen India’s data protection framework. Industry leaders see this as a huge opportunity, but challenges remain. Data centres consume massive amounts of power and water, raising sustainability concerns. The Economic Survey itself admits that AI and digital growth come with heavy environmental costs. With grid capacity and renewable energy already under strain, the question is whether India can scale its digital ambitions without hitting resource limits. Budget 2026 sets the stage, but the next chapter will decide how sustainable this boom really is.