Union Budget 2026 marks a decisive shift in how India views infrastructure. Beyond roads and railways, the government is now treating data, logistics and storage as national assets. In doing so, it has quietly redrawn the growth map for real estate linked to data centres, warehousing and logistics.
Finance Minister Nirmala Sitharaman’s announcement of a tax holiday till 2047 for foreign cloud service providers setting up data centres in India signals long-term policy certainty. It also places digital infrastructure firmly alongside ports, power and transport as a pillar of economic growth.
The Budget’s emphasis on capital expenditure, logistics corridors and asset monetisation reinforces this direction. Together, these measures are expected to unlock sustained demand for industrial land, power-backed campuses, warehousing clusters and large-format commercial real estate.
A Long Runway For Data Centres
The headline reform is the tax holiday till 2047 for foreign companies providing cloud services using data centres located in India. The condition that Indian customers be served through domestic reseller entities ensures local participation while keeping India attractive to global players.
The introduction of a 15 percent safe harbour margin for related-party data centre services reduces regulatory friction and transfer pricing disputes. This clarity is crucial for hyperscalers and multinational firms planning multi-decade investments.
India’s data centre market is still small by global standards, accounting for only about three percent of global capacity. However, growth projections are steep. Capacity is expected to cross 2 GW by 2026 and potentially exceed 8 GW by 2030, driven by investments estimated at over $30 billion.
Global majors such as Google, Amazon Web Services, Microsoft and Meta, along with domestic conglomerates like Reliance Industries, are already committing capital. Google’s planned 1 GW AI data centre campus in Visakhapatnam underlines how large and location-specific these investments are becoming.
For real estate, this translates into demand for large land parcels, reliable power access, water security and proximity to fibre networks. Data centre campuses are no longer niche assets. They are becoming anchor developments around which industrial and logistics ecosystems form.
Warehousing And Logistics Get Scale And Speed
Alongside digital infrastructure, the Budget makes a strong push for physical supply chains. A proposed ₹75,000 crore investment in logistics and warehousing infrastructure aims to accelerate the development of multimodal logistics parks, modern warehouses and advanced cold chains.
Safe harbour norms for bonded warehouses are expected to simplify customs procedures and lower operating costs. This directly benefits exporters, manufacturers and third-party logistics providers while improving space absorption in warehousing clusters.
The focus on logistics aligns with India’s ambition to integrate more deeply into global supply chains. As manufacturing, e-commerce and agri-processing expand, demand for Grade A warehousing, fulfilment centres and last-mile logistics facilities is expected to rise across Tier I and Tier II cities.
From a real estate perspective, logistics parks are emerging as one of the most investible asset classes, attracting private equity, sovereign funds and REIT-style structures.
Real Estate Monetisation And REITs
The Budget also empowers public sector enterprises to unlock value from underutilised government-owned real estate through Real Estate Investment Trusts. By monetising commercial and logistics assets, CPSEs can recycle capital into new infrastructure projects.
This approach not only deepens India’s REIT market but also increases the supply of institutional-grade assets. For investors, it offers stable yields. For cities, it accelerates redevelopment and modernisation of legacy properties.
Power, Sustainability And The Hidden Constraints
Industry leaders have welcomed the Budget’s direction but caution that execution will matter. Data centres are power- and water-intensive assets. Sustained growth will depend on parallel investments in energy infrastructure, renewable integration and urban utilities.
The Budget’s broader push toward green infrastructure and renewable energy integration is therefore critical. Incentives for sustainable data centres and cleaner logistics facilities could help India avoid the environmental bottlenecks seen in more mature markets.
Second-Order Gains For Real Estate
Analysts point out that the impact of these measures will extend beyond core infrastructure. Industrial real estate, power equipment manufacturing, cooling systems, network infrastructure and even housing near logistics corridors stand to benefit.
Hospitality and mixed-use developments are also likely to see demand rise as connectivity improves and regional economies expand. University townships, tourism hubs and industrial corridors announced in earlier sections of the Budget further reinforce this urban expansion cycle.
Dr Niranjan Hiranandani, Chairman of NAREDCO, noted that the Budget strengthens supply chain resilience while creating a robust, future-ready digital and logistics ecosystem. According to him, these reforms will drive innovation, attract foreign capital and fuel sustainable economic growth.
A Structural Bet, Not A Short-Term Stimulus
What sets Budget 2026 apart is its long-term framing. Rather than offering short-lived incentives, it creates a policy runway that stretches over two decades. The tax holiday till 2047 is not just a fiscal measure. It is a statement of intent.
Real estate linked to data centres, warehousing and logistics is being positioned as strategic infrastructure. This shifts investor perception from cyclical demand to structural growth.
As Cushman & Wakefield’s Anshul Jain points out, India remains under-penetrated relative to its digital consumption. The Budget’s measures strengthen the underlying drivers of long-term demand and capital formation.
In that sense, Budget 2026 does not merely support real estate. It redefines which parts of the sector will matter most in India’s next phase of growth.
