The government of Andhra Pradesh and the Center collaborated to eliminate all taxation obstacles for Google to establish a $10-billion data centre in Vishakhapatnam, according to Nara Lokesh, Minister for Information Technology, Electronics, and Communications in the AP government.

"We ensured there is no backdated taxation in this area (data centres). Given that data will be handled in these centres, we received confirmation from the Central government on the taxation method," Nara Lokesh.

The Minister mentioned that he encountered Google executives for the first time in September 2024 and personally drove them to the location in Vishakhapatnam where the hyperscale data center is set to be constructed. Nara Lokesh remarked, "This will be the largest FDI investment in India’s history."

The suggested Raiden Info Tech (a subsidiary of Google) data center initiative in Visakhapatnam (Vizag) entails an investment of Rs 87,520 crore ($10 billion) and is projected to generate 188,000 jobs, contributing Rs 10,518 crore yearly to Andhra Pradesh’s gross state domestic product (GSDP) from 2028 to 2032.

"In Andhra Pradesh, we possess a dual-engine 'bullet train'. We can offer top-tier incentives and assist with policies, including what needs to be accomplished at the central level," stated the Minister.

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Regarding taxation, we have clarified the definition of ‘permanent establishment’ to provide tax certainty.

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According to income tax regulations, a PE is a crucial concept in the context of Double Taxation Avoidance Agreements (DTAAs) – tax treaties established between nations.

It establishes a basic level of presence that a foreign company needs in a nation for that nation to be entitled to tax the company's business earnings.

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Nara Lokesh also explained that the Andhra government has brought certainty on the treatment of data to ensure that India origin data stays within the country.