Gujarat Unveils Ambitious Data Centre Policy to Drive AI Investment

The Government of Gujarat has recently launched its ambitious Data Centre Policy 2026-29, a strategic plan designed to position the state as a premier hub for hyperscale artificial intelligence (AI) and digital infrastructure in India. This initiative reflects the state's vision to become a global leader in digital services by harnessing the growing demand for data centers driven by the booming digital economy. With a target of developing up to 7.5 GW of data centre capacity and attracting investments totaling ₹6 lakh crore, the policy is set to create a robust environment for cloud providers, technology firms, and infrastructure developers.

A focal point of this policy is the integration of sustainability within the data centre ecosystem. The Government of Gujarat mandates that at least 51% of the energy used by data centres will come from renewable sources, demonstrating a commitment to green technology and energy-efficient infrastructure. This sustainability clause not only addresses environmental concerns but also complies with the industry's increasing pressure to adopt eco-friendly practices. As P. Bharathi, Secretary of the Science and Technology Department, stated, "Data is even more valuable than oil... data centres have become strategic digital infrastructure for developed economies." This shift reinforces the importance of strategic partnerships between the public and private sectors to facilitate long-term growth and innovation in the digital landscape.

Additionally, the Data Centre Policy offers a comprehensive range of fiscal and non-fiscal incentives, aimed at simplifying the investment process. The state will provide tax rebates, capital subsidies, and exemptions on registration and stamp duty, thus reducing the overall cost of setting up operations. For instance, a 2.5% capital subsidy is available for eligible fixed capital investments in the Dholera region, and an up to 4% interest subsidy on term loans for ten years capped at ₹25 crore annually. Furthermore, operational cost savings will be bolstered by a ₹1 per unit power tariff subsidy over twenty years. Such incentives are poised to attract a diverse range of players in the AI and data centre sectors.

To facilitate further connectivity, two new cable landing stations are under development, and additional projects are anticipated. This infrastructure boost, alongside existing facilities like Dholera and GIFT City, enhances Gujarat's competitive edge, making it an attractive destination for global data centre investments. It empowers the state to significantly contribute to India's data economy as it aims to ramp up its global data centre capacity, currently lagging behind countries like the United States and China which hold a combined 70% of the market.

By fostering a collaborative environment between industry, academia, and startups, the Gujarat government emphasizes the creation of high-value jobs and skill development in cloud engineering, cybersecurity, and emerging technologies. This strategic focus on workforce development aligns with the anticipated growth in job creation resulting from the data centres, making Gujarat not just a hub for infrastructure but a cradle for talent in the digital economy.

The importance of this policy extends beyond just economic metrics; it represents a critical shift in how digital infrastructure can drive regional development. As M.K. Das, the Chief Secretary of Gujarat, remarked, "We are confident it will attract investments of ₹6 lakh crore, create 7.5 GW of data centre capacity and generate significant employment." This confidence reflects a proactive approach to digital transformation in India, reinforcing the state’s determination to lead in an increasingly digital world.

Overall, this Data Centre Policy 2026-29 heralds a new era for Gujarat, promising expansive growth in digital infrastructure, sustainable practices, and a vibrant job market that could significantly uplift the local economy and position India competitively in the global data economy.