Several U.S. technology companies have put decisions on leasing large data-center facilities in India on hold as rising trade and policy uncertainty complicates long-term infrastructure commitments, according to reporting and industry sources.
New hyperscale deals for large colocation or leased data-center campuses have been stalled for more than two months, with unnamed industry contacts saying negotiations have been deferred while firms reassess risks tied to shifting U.S. trade policy and export controls, CNBC reported. It has been reported that some companies expect to revisit those plans in the next three to six months but are keeping options open in the meantime.
Analysts and market observers point to concrete policy developments that have added to corporate caution. Reuters has documented a separate set of U.S. policy moves, including tighter visa rules and higher fees for H-1B applicants, that are already prompting U.S. firms to rethink how and where they locate high-value technology work, a shift that can in turn affect capital decisions such as where to park large data-center capacity. Industry executives told Reuters that these measures are accelerating the re-evaluation of global footprints and investment timing.
The pause comes amid a wave of announced and planned projects in India: a recent report noted global AI and cloud players have been scouting major India deployments, and some startups and cloud vendors have publicly signalled multi-hundred-megawatt and gigawatt-class ambitions for the market. Those longer-term plans have not been uniformly cancelled, but several potential lease agreements and campus deals now appear to be in a holding pattern while legal and trade risks are reappraised.
Market participants described the calculus as pragmatic rather than panicked. One industry source told CNBC that companies want to avoid locking into multi-year capacity and power purchase agreements until there is greater clarity on whether U.S. export or trade measures might restrict hardware flows, or on the potential for reciprocal tariffs and other measures that could change project economics. That caution is especially pronounced for hyperscalers, which typically sign large, inflexible leases tied to long-life power and land contracts.
Investors and real-estate firms that operate wholesale and hyperscale data parks said a pause in signing new leases could slow near-term absorption rates but would not immediately derail India’s broader data-center boom. India remains attractive for its market growth, growing cloud demand, and improving connectivity: factors that industry reports say will likely bring many of these projects back when the policy environment stabilizes.
What to watch next: companies and landlords will be monitoring any U.S. regulatory moves (tariffs, export controls, or visa changes) and forthcoming bilateral trade talks for cues; if those show signs of easing, the frozen deals could thaw within months, as some hyperscalers told CNBC. Until then, industry players say the market will be governed by a familiar tension, India’s strong demand fundamentals versus near-term geopolitical and policy risk.
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