India Builds, America Bills

India's Data Centre Boom Leaves Startups And MSMEs Behind

By Dev Chandrasekhar

India's data infrastructure story, told in press releases, is a compelling one. 

The Adani Group has committed $100 billion by 2035 to renewable-powered, AI-ready hyperscale data centres, which is expected to catalyse a further $150 billion across the wider ecosystem. 

Microsoft has committed $17.5 billion over four years to cloud and AI infrastructure in India, its largest investment in Asia. Google has partnered with Adani Enterprises for a gigawatt-scale AI campus in Visakhapatnam, and AWS has committed $12.7 billion through 2030, $8.3 billion of it in Maharashtra. 

Data centres now carry Infrastructure Status, unlocking cheaper long-tenor credit, and the India AI Mission has budgeted Rs 10,372 crore for shared AI compute accessible to Indian startups. The market is projected to roughly double to $22 billion by 2030. 

On paper, the plumbing is being laid for India's AI decade.

But for most startups, 90-95% of billings are in US dollars; the small remainder billed from India mostly covers basics such as local hosting, billing, and accounting tools.

That remainder is the operational residue of being physically located in India — a GST invoice.

The Stack They Actually Use

Walk the stack from the bottom up. Compute and storage sit on AWS, Google Cloud or Azure, all priced in dollars and provisioned through foreign entities. The AI models that increasingly power product features come through APIs (the metered connections through which one company's software uses another's) from OpenAI, Anthropic and Google, billed in dollars under American terms of service. 

The backend and authentication layer for most modern startups is Supabase, a San Francisco-based platform built on PostgreSQL, billed in US dollars, with no Indian data residency by default. 

Everything else a startup runs on, from GitHub for its code to Notion for its notes and Figma for its designs, plus the long tail of tools for deployment, monitoring and bug tracking, is American too. Dollars, again.

Supabase is worth pausing on because it illustrates how invisible the dependency is. It is not a hyperscaler and not a household name, but it has become the default backend scaffolding for a significant share of Indian startups. Their users log in through Supabase, their data is stored in Supabase, and their files are served through Supabase. An Indian equivalent does not exist.

This is not confined to startups. 

Tech Dependence 

Affle (India) has migrated its infrastructure to AWS Graviton chips. Happiest Minds is a consulting partner for both AWS and Microsoft. LTIMindtree holds strategic partnership agreements with AWS, Google and Microsoft simultaneously. HCLTech's AI Force platform is integrated with Azure OpenAI, Anthropic's Claude via Amazon Bedrock, and Google Gemini. The operational and AI stacks of India's most prominent technology companies are entirely American.

The dependence, in other words, runs across India’s technology industry. This piece anchors on startups and MSMEs because they are the customers in whose name the buildout is justified, and therefore the test of its promise.

The Indian MSME or startup building a product in 2026 is, in technological terms, a dollar-spending entity that happens to have its founders registered with the Registrar of Companies. 

India has neither a foundation model nor hyperscale cloud with the service depth AWS has spent fifteen years building, nor an equivalent of Supabase, Stripe or Twilio. 

The startup builds on what exists. What exists is American.

The billions being committed are, for the most part, not aimed at the Indian MSME or early-stage startup. 

The construction narrative also underplays a deeper dollar leak.

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25.91 lakh units

That is how many vehicles India sold in July 2026, as the auto retail sector posted its strongest-ever July, marking a 25.89% year-on-year jump, the latest data from the Federation of Automobile Dealers Associations (FADA) showed.

Every vehicle category, including two-wheelers, three-wheelers, commercial vehicles, passenger vehicles, tractors and construction equipment, recorded all-time July highs, driven by GST 2.0 affordability, favourable festive timing and improving rural cashflows.

Sai Giridhar, vice president at FADA, said PV inventory remained elevated at 33-35 days, well above the industry body's 21-day benchmark. He added that alternative fuel vehicles are now within striking distance of petrol. The Core earlier reported how consumers are increasingly choosing EVs, CNG and hybrids over conventional fuel options, as uncertainty over the E20 petrol transition and a growing preference for lower ownership costs push buyers towards alternative fuels.

Overview: Two-wheelers led volumes at 18.18 lakh units, up 28.25%, while passenger vehicles crossed the 4-lakh mark for the first time in July, rising 19.13%. Commercial vehicles neared the one-lakh mark, up 24.04%, and tractors surged 28.10% on catch-up Kharif sowing.

EV retail touched a record 3.28 lakh units, lifting overall penetration to about 12.7% from 9.6% a year earlier.

Future: Looking ahead, 74.3% of dealers expect growth in August, buoyed by Onam and Raksha Bandhan, while 87.85% foresee growth over August-October, though FADA cautioned against reading festive season numbers without accounting for base-year distortions.

Maruti Seeks Tax Relief

Maruti Suzuki India on Thursday requested the central government to introduce an amnesty scheme or an "as-is" settlement option to resolve old indirect tax litigation, saying it would help the automobile industry move beyond long-pending legal cases.

Catch Up Quick: Speaking at the Society of Indian Automobile Manufacturers (SIAM) Automotive Tax Conference, Chief Financial Officer Arnab Roy said this will provide long-term certainty for businesses.

An amnesty scheme would allow companies to pay the pending tax amount without interest or penalties, while an "as-is" settlement would treat past tax filings as final and avoid fresh demands.

Context: While Roy credited last year’s GST reforms, his recent comments came as Maruti Suzuki and its subsidiary, Suzuki Motor Gujarat (SMG), have been involved in multiple GST and customs-related tax disputes.

Google's Data Centre Faces Pushback

Google's biggest-ever India investment, a $15 billion data centre hub in Andhra Pradesh's Visakhapatnam, is running into resistance from environmental activists even as construction is well underway, Reuters reported.

Setup: The project, being built in partnership with billionaire Gautam Adani's group and expected to create up to 1,88,000 jobs, has drawn legal challenges over its impact on water supplies and its proximity to the Kambalakonda Wildlife Sanctuary, located just 860 metres away and home to leopards and pangolins.

The city already faces a water shortfall, receiving 410 million litres a day against a requirement of 480 million. Activists argue a guaranteed 20-year water supply to the project will worsen the crunch.

Critical Moment: Andhra Pradesh's High Court has asked the state government to respond to allegations that the project strains a nearby reservoir.

Google told Reuters it will use advanced air cooling to protect local water resources and sound-dampening measures near the wildlife sanctuary.

Trent Profits on Expansion Spree

Trent's quarterly profit rose 22% in the June quarter, climbing to Rs 5.19 billion as its Westside and Zudio chains continued expanding beyond metro cities.

Revenue grew 18% to Rs 57.55 billion. Trent ended June with 1,312 stores across 330 cities, up from 1,043 stores in 242 cities a year earlier.

Background: Trent's results stand out at a time when much of India's mid-segment fashion retail is under pressure.

As The Core wrote last month, brands like Pantaloons and Max have been caught between two forces, value chains like Zudio pulling customers from below with better design and sub-Rs 999 pricing, and D2C labels and international fast-fashion brands drawing aspirational shoppers from above.

Forecast: Trent itself flagged rising input costs and warned that prolonged Middle East disruptions could affect supply chains and commodity prices. Like-for-like growth for its fashion portfolio stayed in the low single digits.

Shares gave up an early 3.7% gain to close slightly lower, a month after slumping 12% on revenue growth that had missed market expectations.

Crackdown On Clicks

Nine digital platforms, including IndiGo, Zepto, BookMyShow, FirstCry, Physics Wallah and SpiceJet, have come under the Central Consumer Protection Authority's (CCPA) scanner for using "dark patterns": deceptive design techniques that manipulate consumers into making purchases or sharing personal information. The Ministry of Consumer Affairs disclosed the action in a written reply in the Rajya Sabha.

Fast Facts: The CCPA has imposed penalties totalling Rs 20 lakh. Zepto received the highest fine of Rs 7 lakh for adding handling charges and a Zepto Pass membership fee during checkout without upfront disclosure, a practice known as drip pricing and basket sneaking.

Physics Wallah was fined Rs 5 lakh for automatically adding a Rs 10 donation at checkout, while IndiGo changed an app prompt that shamed users for declining an add-on after regulatory intervention.
Impact: 

Impact: The action marks one of India's biggest enforcement drives against dark patterns since the CCPA introduced the Guidelines for Prevention and Regulation of Dark Patterns, 2023.

The guidelines identify 13 deceptive online practices, including false urgency, basket sneaking, confirm shaming, drip pricing and subscription traps, as unfair trade practices. In 2025, the regulator also asked e-commerce platforms to conduct self-audits to detect and eliminate such practices.

"The future is that large companies, which are very well structured, will actually be the most vulnerable to job losses because AI can automate many of their structured processes. Large companies will probably be net job losers in the coming years. The future will be small businesses in terms of job creation. AI will enable millions of entrepreneurs to create businesses that never existed before. India will become the AI use case capital of the world."

— Infosys co-founder Nandan Nilekani, speaking at an event organised by the National Council of Applied Economic Research (NCAER).

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Markets Steady As Traders Wait For A Potential Deal To End The War

On Episode 941 of The Core Report, financial journalist Govindraj Ethiraj talks to Sai Giridhar, Vice President at FADA as well as Aviation Experts, Sean Mendis and Sanjay Lazar.

• Auto Sales Hit Records, Again. What Is Driving Higher Sales?

• Markets Steady As Traders Wait For A Potential Deal To End The War

• Microsoft Announces New Data Center, Google Faces Opposition For Its Project

• What Should Air India’s Priorities Be And What Can The Incoming CEO Bring To That Table?

• Honda Will Outsource Development Of A New Vehicle To Tata Group Company