As global attention turned to India during the AI summit, the country advanced a vision rooted in “Sarvajan Hitay, Sarvajan Sukhay” and concluded a “Charter for Democratic Diffusion of AI”. The focus was clear: democratise AI benefits, prevent concentration of technology in a few hands, promote local innovation, and strengthen AI ecosystems while respecting sovereign legal boundaries.
The summit underlined global cooperation on data flow, governance and AI’s socio-economic impact. Data, now a capital asset in the AI era, must belong to those who generate it. Its use must be equitable, inclusive and accessible, without monopolies, and grounded in validity and legitimacy.
India’s 1,700 Global Capability Centers (GCCs) are central to this ambition. Growing at a CAGR of 7% between FY20 and FY25, GCCs employ nearly 1.9 million people and power the country’s digital and innovation ecosystem. They are integrating AI across cloud infrastructure, product platforms and enterprise operations, building real-time adaptive systems. As GCCs expand into tier II and tier III cities, they are driving deeper AI penetration across the country.
Recent Budget announcements reinforce this direction. Tax incentives for the technology sector, including relaxed safe harbour rules, aim to reduce transfer pricing litigation that has long affected the IT and ITeS industry. In a digital economy where intangibles and algorithms challenge traditional arm’s length principles, these reforms offer relief. Tax holidays for data centres further support a stronger domestic AI ecosystem.
The Advance Pricing Agreements (APA) programme of the Income Tax Department has also gained importance. It helps prevent transfer pricing disputes and ensures long-term tax certainty. APAs can be unilateral, negotiated between the government and a multinational enterprise (MNE), or bilateral, involving the MNE’s resident tax authority to ensure fair tax sharing.
Workstream III of the UN Framework Convention on International Tax Cooperation recognises APAs as a key dispute prevention tool. In a complex, multi-jurisdictional digital economy marked by blurred value creation and information asymmetry, APAs provide transparency, trust and revenue stability.
To sustain AI leadership, GCCs must move beyond low-value functions. They need to invest in R&D, innovation and value-driven intangibles, while fostering a risk-reward culture. Backed by tax certainty and policy support, GCCs are positioned to anchor India’s rise in the global AI landscape.
Also read: Viksit Workforce for a Viksit Bharat
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