Gujarat Launches Ambitious Data Centre Policy to Attract Rs 6 Lakh Crore Investments

Gujarat has formally notified the Viksit Gujarat Data Centre Policy 2026-29, setting an ambitious target of creating 7.5 gigawatts (GW) of hyperscale Green AI data-centre capacity and attracting investments of around Rs 6 lakh crore. The policy seeks to position the state as one of India’s leading destinations for artificial intelligence, cloud computing, high-performance computing and next-generation digital infrastructure. The initiative is designed to support the vision of “ Viksit Bharat 2047” by creating an infrastructure base capable of handling the rapidly expanding demand for AI models, cloud platforms, digital services and data-intensive industrial applications. Gujarat aims to attract global hyperscalers, cloud-service providers, artificial intelligence companies, technology enterprises and institutional investors to build large-scale facilities across the state. The policy comes at a time when data centres are becoming critical infrastructure for the digital economy. AI applications require enormous computing power, high-speed connectivity, reliable electricity and large-scale storage capacity. By targeting 7.5 GW, Gujarat is seeking to move beyond conventional data-centre development and establish itself as a major hub for hyperscale and AI-optimised facilities. The policy places special emphasis on the Dholera Special Investment Region (SIR), which the state plans to develop as one of the world’s largest hyperscale Green AI data-centre hubs. Dholera’s planned industrial infrastructure, large land parcels and sustainable-development framework are expected to make it suitable for large facilities requiring significant power, water, connectivity and space. The government’s objective is to leverage Dholera not only as a location for individual data centres but as an integrated digital-infrastructure ecosystem. This could include hyperscale campuses, renewable-energy systems, transmission infrastructure, water and desalination facilities, high-speed telecom networks and supporting technology services. The policy provides a 2.5% capital subsidy for eligible projects located in Dholera on eligible fixed capital investment. The eligible investment base can include buildings, electrical and mechanical systems, cooling infrastructure , networking, power backup, security systems and other essential data-centre infrastructure. Land acquisition, land development and semiconductor chips are excluded from the eligible investment calculation. To reduce the cost of setting up and operating data centres, Gujarat has announced a broad package of fiscal incentives. These include capital subsidies, interest subsidies, power-tariff support, reimbursement of electricity duty, exemption from stamp duty and registration fees, SGST reimbursement and financial assistance for captive desalination plants. Eligible developers can receive an interest subsidy of up to 4% annually for 10 years, subject to an annual ceiling of Rs 25 crore. The policy also provides a power-tariff subsidy of Rs 1 per unit for 20 years, along with 100% reimbursement of electricity duty for the same period. Companies can also procure power through open access, giving large data-centre operators greater flexibility in sourcing electricity. Eligible projects may receive 100% exemption from stamp duty and registration charges on land transactions, while SGST reimbursement is available on eligible plant and machinery, building infrastructure and operational services, subject to prescribed conditions. The overall financial assistance under the policy is capped at 75% of eligible fixed capital investment, with incentives to be disbursed over a period of 20 years. These benefits will remain available until Gujarat reaches its targeted aggregate installed capacity of 7.5 GW. Sustainability is a central feature of the policy. Eligible data-centre projects will be required to source at least 51% of their operational electricity consumption from renewable and green-energy sources. The provision is intended to ensure that the expansion of AI and cloud infrastructure does not lead to a proportionate increase in dependence on fossil-fuel-based electricity. The policy also addresses water availability, an important concern for large data centres because cooling systems can require substantial water resources. Gujarat is offering financial assistance for captive desalination plants, particularly to help projects secure a dependable and sustainable water supply. The government has indicated that support for desalination capacity could extend to up to 20% of eligible capital expenditure, or Rs 2 crore per million litres per day of desalination capacity, subject to prescribed limits. This could encourage developers to establish dedicated water systems instead of placing additional pressure on local municipal supplies. Alongside financial support, the policy introduces several non-fiscal measures aimed at improving ease of doing business. These include streamlined approvals, flexible building and development regulations, additional Floor Space Index, coordinated support for electricity and water connections, and facilitation of statutory clearances. The state is also offering support for dual power supply, open-access electricity procurement, 24×7 water connectivity, single-window clearances and flexible arrangements for utilities and backup systems. Additional FSI and relaxed building regulations are intended to allow developers to use land more efficiently and construct large, vertically integrated data-centre campuses. The policy applies to companies, special-purpose vehicles and other legally recognised entities that develop or operate data centres with a minimum approved IT-load capacity of 150 megawatts. Eligible applicants must secure in-principle approval during the policy period, while projects already receiving incentives under another Gujarat government scheme will not be eligible to claim benefits under this framework. Gujarat’s data-centre strategy is also linked to India’s wider objective of strengthening digital sovereignty. A larger domestic data-storage and computing ecosystem can reduce dependence on overseas infrastructure, support sensitive data requirements and provide Indian businesses with faster access to AI and cloud services. The policy is expected to create high-value employment in data-centre operations, cybersecurity, cloud computing, artificial intelligence, electrical engineering, cooling systems, facilities management and network administration. It could also generate indirect opportunities in construction, equipment supply, renewable energy, water treatment, logistics and maintenance. The state government has invited global hyperscalers, cloud-service providers, AI firms, technology companies and institutional investors to participate in what it describes as the building of India’s digital infrastructure ecosystem from Gujarat. The Viksit Gujarat Data Centre Policy 2026-29 represents a major financial and industrial bet. The target of Rs 6 lakh crore in investment and 7.5 GW of capacity places Gujarat among the most ambitious states in India’s competition for AI and cloud infrastructure.