Gujarat launches ambitious Data Centre Policy

The Gujarat government on Thursday launched the 'Viksit Gujarat Data Centre Policy 2026-29', and announced that it has already received proposals from 14 companies to set up data centres and expects investments of more than Rs 6 lakh crore in the first phase.

Launching the policy at the Mahatma Mandir Convention Centre here, Chief Minister Bhupendra Patel said the initiative will make Gujarat the country's preferred destination for data centres and further strengthen its digital economy.

Science and Technology Minister Arjun Modhwadia said the state aims to emerge as India's leading AI and data centre hub over the next decade. Gujarat has become the first state in the country to have such dedicated policy, he added.

Addressing reporters later, Modhwadia said around 14 hyperscale data centre investors, including companies partnering with global technology firms, have expressed interest in Gujarat.

"Dholera alone is expected to house a data centre cluster with a capacity of 7 to 8 GW, attracting investments of about Rs 6-7 lakh crore. A one GW data centre requires an investment of Rs 70,000 crore to Rs 1 lakh crore. In the first phase itself, we expect investments exceeding Rs 6 lakh crore," Modhwadia said.

Calling data the "new wealth" of the digital economy, Modhwadia said India currently has only around 200 data centres with about 2 GW capacity compared to nearly 5,500 in the United States and more than 500 in the United Kingdom.

He said the policy is aimed at creating a complete AI ecosystem encompassing artificial intelligence, cloud computing and quantum computing rather than merely building data storage facilities.

Speaking at the launch, Patel said, "India, under the leadership of Prime Minister Narendra Modi, is emerging as one of the world's largest producers and users of data, making digital infrastructure a key pillar of economic growth. With Viksit Gujarat Data Centre Policy 2026-29, Gujarat will become the best destination for setting up data centres in the country."

He said rapid growth in AI, cloud computing, electronics manufacturing and digital services has created unprecedented demand for scalable digital infrastructure.

"The policy reflects the state's commitment to sustainable and long-term development and will play an important role in building next-generation digital infrastructure for both Gujarat and the country," Patel said.

Deputy Chief Minister Harsh Sanghavi said Dholera is set to become the world's largest "data centre city", with the government already receiving requests from domestic and global companies seeking nearly twice the policy's target capacity of 7.5 GW.

He said the government also plans to develop Dholera into a hub for Global Capability Centres (GCCs), supported by a new airport and a semi-high-speed rail link connecting the area with Ahmedabad.

Sanghavi said stakeholder consultations would soon be held and senior nodal officers will be appointed to facilitate investors and speed up project approvals.

The policy places strong emphasis on sustainability by mandating that at least 51% of electricity consumed for core data centre operations must come from green or renewable energy sources.

Developers will also be required to meet their water requirements through captive desalination plants to avoid burdening local freshwater resources, Modhwadia said.

To support such projects, the policy provides assistance of up to 20% of eligible capital expenditure, or Rs 2 crore per million litres per day of desalination capacity, subject to prescribed limits.

The policy targets establishment of 7.5 GW of data centre capacity in Gujarat and offers a range of fiscal incentives, including a 2.5% capital subsidy for eligible projects in the Dholera region, up to 4% interest subsidy for 10 years and Rs 1 per unit power tariff subsidy for 20 years.

Eligible investors will get 100% exemption from stamp duty and registration fees, reimbursement of electricity duty for 20 years and reimbursement of eligible SGST on investments and operations, the policy document said.

It also provides additional Floor Space Index (FSI), relaxed building norms, rooftop utility permissions, dual power supply, open access for electricity procurement, 24x7 water supply, single-window clearances and sub-leasing of land without additional charges in the first instance.

Under the policy, only projects with a minimum approved IT load of 150 MW will be eligible for incentives, it said.

Total financial assistance has been capped at 75% of eligible fixed capital investment and will be disbursed over a period of 20 years.

Data centre operations will also be treated as an "essential service" under Gujarat Essential Services Maintenance Act, ensuring uninterrupted operations, as per the policy document.