India holds infrastructure talks with Microsoft to back national AI push

India is accelerating its efforts to position itself as a global powerhouse for artificial intelligence, holding high-level talks with Microsoft to expand the infrastructure needed to power the technology.

Union Commerce and Industry Minister Piyush Goyal met with Puneet Chandok, the president of Microsoft India and South Asia, to discuss scaling up data centre capacity and driving forward the state-backed IndiaAI Mission. Writing on social media after the meeting, Goyal said the discussions aimed to make India a "trusted global partner in AI", pointing to the country's rise as a preferred hub for international technology investment.

The meeting comes as Microsoft prepares to execute a massive USD 17.5 billion expansion in India. Announced in late 2025, the investment will run from 2026 to 2029, targeting cloud and AI infrastructure, digital skilling, and broader operations. This funding is in addition to a previously announced USD 3 billion commitment by the firm.

Microsoft has already been expanding its physical network across the country. In August, it opened its fourth operational cloud region in Hyderabad, known as the India South Central region, to meet surging local demand for cloud services and data storage.

For New Delhi, partnering with tech giants like Microsoft is a key part of its broader strategy to build sovereign AI capabilities. The government approved its own IndiaAI Mission in March 2024, backing it with a five-year budget of Rs 10,371.92 crore. The initiative funds everything from developing indigenous AI models and supporting local startups to training the domestic workforce.

At the heart of this state effort is raw computing power. The government has already onboarded more than 38,000 graphics processing units (GPUs) into a shared computing facility, which is designed to give local researchers, academic institutions, and early-stage companies access to the heavy-duty hardware required to train AI models. The government plans to secure another 20,000 GPUs to expand this national capacity.

Away from the tech sector, Goyal also focused on expanding India's diplomatic and economic reach into South American markets. The commerce minister held a separate meeting with Uruguay’s Foreign Minister, Mario Lubetkin, to discuss trade and investment.

The two ministers focused on deepening bilateral ties and taking forward India’s partnership with MERCOSUR, the South American trade bloc. India already has a preferential trade agreement with the bloc, and Goyal noted that the talks explored new ways to build on the economic complementarities between India and Uruguay.