IFSCA Proposal on GPU & Data Centre Equipment Leasing as a Financial Product

1. Overview of the Consultation

The International Financial Services Centres Authority (IFSCA) has circulated a detailed public consultation paper proposing that “GPU and connected data centre equipment” be formally treated as a financial product when used in operating lease or hybrid operating–financial lease structures within an International Financial Services Centre (IFSC).

This initiative is grounded in Government of India notification S.O. 5199(E) dated 14 December 2021, which empowers IFSCA to identify specific products or equipment whose operating lease (including hybrid structures) may be categorised as financial products under section 3(1)(d)(vi) of the IFSCA Act, 2019.

Key aspects at this stage:

  • The proposal is consultative; it is not yet law.
  • A draft notification has been prepared (Annexure I of the consultation).
  • The notification will become effective only from the date of its publication in the Official Gazette, if and when it is finally issued.
  • Public comments have been invited up to 28 August 2026.

The intent is to enable IFSC-based entities to undertake regulated operating lease and hybrid lease activities in high-value, AI-focused computing infrastructure, thereby expanding the leasing ecosystem in GIFT-IFSC.

2. What Exactly Is Being Proposed?

2.1 Financial Product Status for GPU and Data Centre Equipment

IFSCA proposes to specify “GPU and connected data centre equipment” as a financial product, so that:

  • Operating leases, and
  • Hybrids of operating and financial leases,

of such equipment, when carried out by a financial institution in an IFSC, will qualify as a permitted financial product and activity under regulation 5(1)(iii)(g) of the IFSCA (Finance Company) Regulations, 2021`.

Leases would be classified in line with Indian Accounting Standards (Ind AS 116), which define when an arrangement is to be treated as a lease, and the nature of that lease.

2.2 Functional (Technology-Neutral) Definition

The proposed specification relies on functional descriptions, rather than brand- or generation-specific terminology. As per the draft notification, the covered product universe includes:

  • Processing units and related storage/input/output units and accessories.
  • Rack-scale artificial intelligence systems supplied and billed as a single integrated system.
  • Electronic integrated circuits containing processors and controllers (including where combined with other circuits).
  • Server power supply units.
  • Network switches, network access controllers and related networking/interconnect equipment.
  • Parts and accessories of the above items, whether supplied together or separately.

These descriptions are explicitly structured to be technology-neutral, and cover accelerated computing systems such as:

  • Graphics processing units (GPUs),
  • General-purpose graphics processing units (GPGPUs),
  • Artificial intelligence accelerators,
  • Tensor processing units (TPUs),
  • Neural processing units (NPUs),
  • And comparable hardware supporting AI training, inferencing, high-performance computing and similar workloads.

The definition also extends to the servers, storage, networking, interconnect and power equipment that are integral to, or ordinarily deployed in support of, such computing systems in a data centre environment.

Alongside the functional definition, an HSN / CTH Classification Matrix (Annexure II) maps the proposed equipment to indicative headings in the First Schedule to the Customs Tariff Act, 1975. The consultation repeatedly clarifies:

The matrix is only indicative and is intended solely to help identify the scope of the financial product.

IFSCA expressly states that:

  • The tariff classification of any equipment continues to be governed by customs law.
  • Inclusion of any item in the matrix does not determine customs duty, exemptions, or treatment under any other statute.

3. Components Within the Proposed Scope

3.1 Core GPU and Data Centre Infrastructure (Part A)

The consultation sets out a list of core assets that together create an integrated accelerated computing environment for AI and high-performance workloads. Broadly, these are:

  1. Processing Units and Related Equipment

    • Indicative CTH: 8471, 8473
    • Illustrative coverage: GPU/AI servers, compute nodes, storage units, and related parts.

  2. Rack-Scale AI Systems

    • Indicative CTH: 8471
    • Integrated AI systems presented as complete rack-scale solutions, comprising compute, interconnect and input/output units.

  3. Electronic Integrated Circuits with Processors/Controllers

    • Indicative CTH: 8542
    • Includes GPUs, AI accelerators, GPGPUs, TPUs, NPUs and comparable accelerated computing processors.

  4. Server Power Supply Units

    • Indicative CTH: 8504
    • Covers power supply units and static converters specifically for servers and rack-level systems.

  5. Networking and Interconnect Equipment

    • Indicative CTH: 8517, 8544
    • Data centre network switches, network interface equipment, transceivers and copper/optical fibre interconnects.