- The Gujarat government has announced the Viksit Gujarat Data Center Policy (2026-29), targeting 7.5 GW capacity and ₹6 lakh crore in capital expenditure.
- Under the policy, a data centre entity must ensure that at least 51% of the electricity consumed for core operations comes from green and renewable sources.
- Nuvama Institutional Equities has reported that the policy is set to significantly boost India's solar power demand, with green hydrogen and AI-linked capacity expected to contribute over 50% of incremental solar capacity growth.
- The policy includes financial incentives such as a 100% reimbursement of electricity duty for 20 years and a subsidy of ₹1 per unit of power consumed by a data centre entity.
- The Gujarat government is looking to attract data centres to the Dholera region, where it is building a smart industrial city.
- The policy has already drawn interest from 14 investors, with demand running at nearly twice the policy target.
Gujarat's new data centre policy for 2026-29 aims to attract ₹6 lakh crore in investments and establish 7.5 GW of capacity, the highest in India. The policy mandates that 51% of energy used must be renewable, reflecting a commitment to sustainability.1
The government offers extensive incentives, including 100% reimbursement of electricity duty for 20 years and a subsidy of Re 1 per unit of power consumed. Additionally, it provides full reimbursement of eligible expenses on infrastructure for up to 20 years, and a 2.5% capital subsidy for projects in the Dholera region.56
P Bharathi, Secretary of Gujarat’s Department of Science and Technology, stated, “Gujarat is the first state to announce the largest capacity data centre as well as the first to have a dedicated policy in the country specifically designed for green AI data centres.”
The policy has already attracted interest from 14 investors, with demand nearly double the target, according to Nuvama. The financial incentives are expected to improve project viability significantly, with a net capex subsidy of 5.2% and a net opex subsidy of 22.1% over 20 years.7
Nuvama also projects that India's solar power capacity could grow from 150 GW to as much as 817 GW by FY35, driven by renewable energy demands from data centres and green hydrogen initiatives.
The Gujarat Electronics and Software Industries Association has praised the policy as one of the strongest frameworks for large hyperscale investments in India.
“The policy offers 100% electricity duty reimbursement for 20 years, a Re 1 per unit power subsidy, and full stamp duty exemption. Separately, Nuvama estimates the policy will boost India's solar capacity from 150 GW to 817 GW by FY35, with green hydrogen and AI contributing over 50% of growth.”
The Indian Express
