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The Gujarat government has launched the Viksit Gujarat Data Centre Policy 2026-29, aiming to establish the state as India's leading destination for data centres, artificial intelligence and digital infrastructure. Announced in the past week, the policy targets 7.5 GW of data centre capacity and has already attracted interest from 14 hyperscale investors, with the state expecting investments exceeding INR 6 lakh crore in the first phase. Dholera has been identified as the principal development hub, with plans for a large-scale data centre cluster supported by fiscal incentives, infrastructure support and sustainability requirements. The policy mandates that at least 51% of operational electricity must be sourced from renewable energy and requires captive desalination for water supply. Eligible projects will receive capital, interest and power tariff subsidies alongside exemptions on stamp duty, electricity duty and other state levies.
The Gujarat government has unveiled the Viksit Gujarat Data Centre Policy 2026-29, setting out a roadmap to position the state as a national hub for data centres, artificial intelligence and advanced digital infrastructure. The policy was launched by Chief Minister Bhupendra Patel at the Mahatma Mandir Convention Centre in Gandhinagar in the past week.
Speaking at the launch, Patel said the rapid growth of artificial intelligence, cloud computing, electronics manufacturing and digital services has significantly increased demand for scalable digital infrastructure. He stated that the new policy is intended to establish Gujarat as the preferred destination for data centre investments while supporting India's expanding digital economy.
Science and Technology Minister Arjun Modhwadia said Gujarat has become the first state in India to introduce a dedicated policy focused exclusively on data centres. He added that the state aims to emerge as the country's leading hub for artificial intelligence and digital infrastructure over the next decade.
Addressing reporters after the event, Modhwadia said the government has already received expressions of interest from 14 hyperscale data centre developers, including companies working with global technology firms. He estimated that the first phase alone could attract investments exceeding INR 6 lakh crore.
According to the minister, Dholera is expected to host a major data centre cluster with a planned capacity of 7 GW to 8 GW. He noted that establishing 1 GW of data centre capacity typically requires investments ranging from INR 70,000 crore to INR 1 lakh crore, placing the anticipated investment in Dholera at approximately INR 6 lakh crore to INR 7 lakh crore.
The policy sets a target of developing 7.5 GW of data centre capacity across Gujarat and seeks to build an integrated ecosystem encompassing artificial intelligence, cloud computing and quantum computing, rather than focusing solely on data storage infrastructure.
To encourage investment, the policy offers a range of fiscal incentives for eligible projects. These include a 2.5% capital subsidy for projects located in the Dholera region, an interest subsidy of up to 4% for 10 years, and a power tariff subsidy of INR 1 per unit for 20 years. Eligible investors will also receive 100% exemption from stamp duty and registration charges, reimbursement of electricity duty for 20 years, and reimbursement of eligible State Goods and Services Tax (SGST) on investments and operations.
The government has also proposed several non-fiscal incentives, including additional Floor Space Index (FSI), relaxed building regulations, rooftop utility permissions, dual power supply, open access for electricity procurement, continuous water supply, single-window approvals and permission to sub-lease land without additional charges during the initial stage.
The policy places significant emphasis on environmental sustainability. It mandates that at least 51% of electricity used for core data centre operations must be sourced from green or renewable energy. Developers will also be required to meet their water requirements through captive desalination plants to minimise pressure on freshwater resources. Financial assistance of up to 20% of eligible capital expenditure, or INR 2 crore per million litres per day of desalination capacity, will be available within prescribed limits.
Only projects with a minimum approved IT load of 150 MW will qualify for incentives under the policy. Total financial assistance has been capped at 75% of eligible fixed capital investment and will be disbursed over a 20-year period. The policy also classifies data centre operations as an essential service under the Gujarat Essential Services Maintenance Act, ensuring uninterrupted operations for facilities established in the state.
Source - PTI
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