GPU and Data Centre Equipment Leasing in GIFT IFSC: IFSCA’s Proposed New Financial Product

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The International Financial Services Centres Authority (IFSCA) has proposed a further expansion of the leasing ecosystem in GIFT IFSC by introducing the operating lease, including any hybrid of operating and financial lease, of GPU and connected data centre equipment as a financial product.

The proposal comes at a time when artificial intelligence infrastructure is emerging as a major capital-intensive investment area. High-performance GPUs, AI accelerators, servers, storage systems, networking infrastructure and related data centre equipment require substantial investment, while rapid technological developments are shortening equipment refresh cycles.

Through its consultation proposal, IFSCA seeks to bring the leasing of such equipment within the financial product framework applicable in GIFT IFSC. If implemented, the framework could create an additional route for financing AI and data centre infrastructure through IFSC-based financial institutions.

However, the proposal is currently under public consultation. The activity will become operational only after the relevant notification and final regulatory framework are issued.

What Has IFSCA Proposed?

The proposal is based on the Government of India notification S.O. 5199(E) dated December 14, 2021, which permits operating leases, including hybrid structures involving operating and financial leases, of products or equipment specified by IFSCA to be treated as a financial product.

Such leasing activities can be undertaken under the IFSCA (Finance Company) Regulations, 2021. IFSCA has previously adopted this route for equipment leasing activities involving asset classes such as aircraft, ships and oilfield equipment.

The proposed development may further expand the range of financial products and structures available within the GIFT IFSC ecosystem, alongside emerging vehicles such as Variable Capital Companies in GIFT IFSC.

IFSCA now proposes to extend the framework to GPU and connected data centre equipment.

Under the proposed structure, the relevant equipment may be held by an IFSC financial institution:

on an ownership basis; or
under a lease-in, lease-out arrangement.

Following stakeholder consultation, the activity may be incorporated into IFSCA’s broader framework governing leasing activities in the International Financial Services Centre, subject to any modifications considered necessary for this asset class.

What Is Covered Under GPU and Connected Data Centre Equipment?

The proposal extends beyond the leasing of standalone graphics processing units.

IFSCA describes the proposed asset category broadly to include accelerated computing devices and equipment connected with their deployment and operation in a data centre environment. This may include servers, storage, networking, interconnect and power-related equipment used directly or indirectly with such computing infrastructure.

The proposed technology-neutral approach covers equipment such as:

Graphics Processing Units (GPUs);
General-Purpose Graphics Processing Units (GPGPUs);
Artificial Intelligence (AI) accelerators;
Tensor Processing Units (TPUs);
Neural Processing Units (NPUs);
GPU and AI servers;
rack-scale AI systems;
storage equipment;
networking and interconnect infrastructure;
server power supply units; and
relevant parts and accessories.

A technology-neutral framework is particularly important in this sector because AI computing hardware continues to evolve rapidly. Rather than limiting the framework to specific existing products, the proposed approach could accommodate future generations of accelerated computing systems without requiring frequent regulatory amendments for every technological development.

Why Is GPU Equipment Leasing Becoming an Important Financing Opportunity?

The IFSCA consultation paper places the proposal against the backdrop of significant growth in global AI and data centre infrastructure investment.

According to figures referred to in the consultation paper, the global GPU market was valued at approximately USD 65 billion in 2024 and is projected to grow to around USD 400–500 billion by 2030.

The paper also refers to estimated global data centre capital expenditure of approximately USD 6.7 trillion by 2030, with around USD 5.2 trillion potentially attributable to AI-capable infrastructure.

At the same time, demand is increasing for access to computing capacity without requiring every user to own the underlying infrastructure.

The financing profile of high-performance AI equipment also differs from that of many conventional technology assets. GPUs and integrated AI systems involve:

significant upfront capital investment;
rapidly evolving technology;
potentially short refresh cycles;
supply constraints for advanced equipment; and
substantial residual-value and obsolescence risks.

For these assets, the primary commercial risk may not simply arise from physical deterioration. Technological obsolescence and the resulting decline in residual value can be equally significant.

This creates a potential role for specialist lessors capable of financing equipment, assessing asset values, managing refresh cycles and redeploying equipment across different users and markets.

Given the importance of estimating residual value and managing technology obsolescence, understanding different business valuation methods and common mistakes can also be relevant when assessing high-value technology assets.

Why Could This Opportunity Be Significant for India?

India’s demand for AI computing infrastructure is expected to increase substantially in the coming years.

IFSCA notes that India currently represents less than 5% of global AI-optimised compute power, while the United States and China together account for more than 70%. However, India’s AI GPU capacity is expected to expand considerably as AI adoption, cloud infrastructure and data centre investments continue to grow.

The consultation paper refers to the possible deployment of approximately 650,000–700,000 GPUs in Indian data centres over the next five years, representing an estimated USD 23 billion investment opportunity.

India also remains substantially dependent on imports for this category of advanced computing equipment.

While initiatives such as the IndiaAI Mission support access to shared public computing infrastructure for startups, researchers, academic institutions and public bodies, significant commercial demand is also expected from:

cloud service providers;
colocation operators;
hyperscalers;
enterprises; and
other private-sector users of AI computing infrastructure.

IFSCA therefore views leasing as one mechanism that could help address part of the substantial financing requirement associated with this growing infrastructure demand.

Why Consider Leasing Instead of Direct Ownership?

The commercial characteristics of AI infrastructure make leasing a potentially attractive alternative to outright ownership.

High-end GPUs, AI servers and integrated accelerated-computing systems can require substantial upfront investment. At the same time, newer generations of technology may offer material improvements in performance and energy efficiency within relatively short periods.

An operating lease may therefore allow businesses to access required infrastructure through periodic lease payments rather than committing the full capital cost upfront.

According to the consultation paper, leasing can potentially offer several advantages, including:

reducing substantial upfront capital expenditure;
transferring part of the obsolescence and residual-value risk to the lessor;
allowing specialist lessors to manage and remarket equipment;
supporting redeployment of equipment between different lessees; and
providing greater flexibility as computing requirements change.

The consultation paper also highlights that successive generations of GPU technology can deliver significant improvements within periods of approximately two to three years. This makes technology obsolescence an important consideration when determining the economic life and residual value of such equipment.

Equipment Leasing and GPU-as-a-Service Are Not the Same

A key aspect of the proposal is the distinction between leasing identified GPU equipment and providing GPU-as-a-Service (GPUaaS).

Under an equipment leasing arrangement, a lessor may own identified GPU or related data centre equipment and lease that equipment to a cloud operator, colocation provider, enterprise or another eligible user. The structure may also potentially involve arrangements such as sale and leaseback.

For an arrangement to qualify as a lease under Ind AS 116, the customer must have the right to control the use of an identified asset.

The accounting and financial reporting implications of such arrangements may also require consideration within the broader framework of accounting and financial reporting in GIFT IFSC.

Accordingly, where specific GPU or related equipment is identified and the lessee has the right to control its use, the arrangement may constitute a lease.

GPUaaS, however, generally operates on a different model. The service provider may retain a pool of computing hardware and provide customers with access to computing capacity. The underlying equipment may be substituted by the provider, with the customer purchasing access to compute resources rather than controlling the use of a specific identified asset.

IFSCA has clarified that the current proposal is intended to cover identified equipment leasing and not GPUaaS service arrangements.

This distinction will be important when structuring transactions and determining whether an arrangement falls within the proposed equipment-leasing framework.

What Equipment May Be Eligible Under the Proposal?

Annexure II to the consultation paper broadly categorises the proposed equipment into two areas.

Core GPU and Connected Data Centre Equipment

The core category includes equipment associated directly with accelerated computing infrastructure, such as:

GPU and AI servers;
compute nodes;
storage units;
rack-scale accelerated-computing systems;
GPUs;
TPUs;
NPUs;
AI accelerators;
server power supply systems;
networking equipment;
interconnect systems;
accelerator boards and modules; and
related parts and accessories.

Allied Power and Thermal Equipment

IFSCA has also invited stakeholder views on whether supporting infrastructure required for operating leased computing equipment should be included within the framework.

This may include:

high-capacity fans and air-movement systems;
precision air-conditioning equipment for data centres;
chillers and liquid-cooling systems;
immersion-cooling equipment;
power distribution units;
busways; and
dedicated switchboard panels.

The inclusion of such equipment is commercially relevant because modern AI computing infrastructure can have substantial cooling and power-management requirements. High-performance AI systems often depend on specialised infrastructure to support their operation efficiently.

IFSCA has specifically sought stakeholder views on whether these allied assets should be included and what eligibility parameters should apply.

Potential Impact on the GIFT IFSC Leasing Ecosystem

The proposed framework could represent a significant expansion of the types of assets that may be financed through GIFT IFSC leasing structures.

GIFT IFSC has already developed a regulatory ecosystem for specialised asset leasing. The proposed inclusion of GPU and connected data centre equipment could extend this ecosystem into the rapidly growing AI infrastructure sector.

The opportunity is particularly distinct from conventional equipment financing because the economics of these assets involve a combination of:

high acquisition costs;
rapid technological developments;
short technology refresh cycles;
potential supply constraints;
specialised cooling and power requirements; and
significant residual-value uncertainty.

These factors may create opportunities for specialised leasing and financing structures designed around the lifecycle and changing value of AI infrastructure assets.

Conclusion

IFSCA’s proposal to recognise the operating lease, including hybrid operating and financial lease structures, of GPU and connected data centre equipment as a financial product could mark an important development for the GIFT IFSC leasing ecosystem.

The proposed framework would expand the focus of IFSC leasing beyond traditional high-value asset classes and potentially create a financing avenue for one of the fastest-growing segments of global infrastructure investment.

GPU and AI infrastructure financing presents unique commercial considerations. High capital costs, rapid technological obsolescence, supply constraints, residual-value risks and the need for periodic technology upgrades can make specialised leasing structures commercially relevant for both equipment owners and users.

At present, however, the proposal remains under public consultation. The final scope of eligible equipment, applicable conditions and regulatory requirements will depend on the notification and final leasing framework ultimately issued by IFSCA.

Businesses, financial institutions, investors and other stakeholders considering AI infrastructure financing through GIFT IFSC should therefore closely evaluate the final regulatory framework once notified.

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