Summary:
The Gujarat Government has unveiled its first Data Centre Policy 2026–29, aiming to attract ₹6 trillion in investments and develop 7.5 GW of data centre capacity to establish the state as a leading hub for hyperscale data centres, cloud infrastructure, and AI-driven digital services. The policy offers a combination of fiscal incentives—including capital and interest subsidies, power tariff support, SGST and electricity duty reimbursements, and stamp duty exemptions—along with fast-track approvals, relaxed building norms, and assured utility access. Applicable to projects with a minimum 150 MW IT load, the policy also mandates that at least 51% of operational power be sourced from renewable energy, while encouraging long-term investments through incentives spread over up to 20 years.
The Government of Gujarat has introduced its first Data Centre Policy 2026–29, with the objective of attracting ₹6 trillion in investments and developing 7.5 gigawatts (GW) of data centre capacity. Through this initiative, the state aims to position itself as India’s premier destination for hyperscale data centres, cloud computing infrastructure, and AI-enabled digital services.
The policy includes a broad range of financial incentives, such as capital and interest subsidies, power tariff support, reimbursement of State Goods and Services Tax (SGST) and electricity duty, assistance for desalination facilities, and exemptions on stamp duty. In addition, it provides several non-financial benefits, including expedited approvals, additional floor space index (FSI), flexible building regulations, open access to electricity, and assured availability of power and water.
Support under the policy will be available only to projects with a minimum approved IT load of 150 MW, with all eligible developments contributing toward the state’s planned 7.5 GW capacity. Financial assistance is limited to 75% of eligible fixed capital investment and may be distributed over a period of up to 20 years. The framework also requires operators to source at least 51% of their electricity for core operations from renewable and green energy.
The incentive package includes a 2.5% capital subsidy for projects located in Dholera, an interest subsidy of up to 4% for ten years (subject to an annual ceiling of ₹250 million), a power tariff subsidy of Re 1 per unit for 20 years, 100% reimbursement of electricity duty for the same duration, complete exemption from stamp duty and registration charges, and SGST reimbursement covering eligible investments in plant, machinery, buildings, infrastructure, and operational services. The policy also offers financial assistance for captive desalination plants, providing 20% of eligible capital expenditure or ₹20 million per million litres per day, within prescribed limits.
On the regulatory front, Gujarat has introduced measures to simplify project implementation, including a dedicated investor facilitation system for quicker approvals, relaxed construction norms, and exemptions related to parking and building height. Operators will also be allowed to purchase electricity through open access, while the state has committed to facilitating dual power supply through independent transmission feeders, continuous water availability, and distribution licences where necessary. Additionally, data centre operations will be classified as an essential service under the Gujarat Essential Services Maintenance Act.
