The government of Gujarat has unveiled its maiden Data Centre Policy 2026-29, targeting Rs 6 trillion in investments and the creation of 7.5 gigawatts (GW) of data centre capacity, as it seeks to establish the state as the country’s leading hub for hyperscale data centres, cloud infrastructure and artificial intelligence (AI)-driven digital services.
The policy offers a comprehensive package of fiscal incentives, including capital subsidy, interest subsidy, power tariff subsidy, State Goods and Services Tax (SGST) reimbursement, electricity duty reimbursement, support for desalination plants and stamp duty exemptions. Non-fiscal incentives include fast-track approvals, additional floor space index (FSI), relaxations in building norms, open access to power, assured electricity supply and water availability.
Incentives under the policy will be available only for projects with a minimum approved installed IT load of 150 megawatts, and the overall framework will apply to projects contributing towards the state’s 7.5 GW capacity target. Total financial assistance has been capped at 75 per cent of eligible fixed capital investment, with incentives disbursed over a period of up to 20 years. The policy also mandates that at least 51 per cent of electricity consumed for core data centre operations be sourced from green and renewable energy.
Among the specific fiscal incentives, the policy offers a 2.5 per cent capital subsidy on eligible fixed capital investment for projects in the Dholera region, an interest subsidy of up to 4 per cent for 10 years subject to an annual cap of Rs 250 million, a power tariff subsidy of Re 1 per unit for 20 years, 100 per cent reimbursement of electricity duty for 20 years, full exemption on stamp duty and registration charges, and reimbursement of SGST on plant and machinery, building infrastructure and eligible operational services. Additional support is available for captive desalination plants, at 20 per cent of eligible capital expenditure or Rs 20 million per million litres per day, subject to prescribed limits.
On the non-fiscal side, the policy provides fast-track statutory approvals through a dedicated investor facilitation mechanism, relaxed building norms, parking and height exemptions, and simplified utility infrastructure norms. Data centre operators may procure electricity through open access, while the state has committed to facilitating dual power supply through independent transmission feeders, round-the-clock water availability and distribution licences where required. Data centre operations will also be designated as an essential service under the Gujarat Essential Services Maintenance Act.