Gujarat eyes ₹17 lakh crore in data centre investment as proposals reach 17 GW
Proposals totalling nearly 17 GW have come in under Gujarat’s new data centre policy, against a 7.5 GW target. Dholera is identified as a major hub, with an extra 2.5% capital subsidy for projects there.
Sep 12, 20262 min read
Illustration: The Times of India
Gujarat has set a target of developing 7.5 GW of data centre capacity, five times India's current installed capacity of around 1.5 GW. Proposals totalling nearly 17 GW have already been received under the state's new data centre policy.
Science and technology minister Arjun Modhwadia told the Gujarat assembly on Friday that if the proposals materialise fully, they could bring more than ₹17 lakh crore in investment to the state. He said both domestic and international companies have shown interest in setting up data centres in Gujarat.
"Data centres are the oil wells of the present era," Modhwadia said, describing the policy as an effort to make Gujarat a "prime mover" in the country's AI revolution.
Dholera as a data centre hub
Dholera has been identified as a major data centre hub, and projects there are eligible for an additional 2.5% capital subsidy. The government is also planning a broader digital infrastructure ecosystem around proposed submarine cable landing stations at Chorwad or Diu, Porbandar, Surat and Dholera.
What the policy offers
The Viksit Gujarat Data Centre Policy 2026-29, announced on July 9, provides:
Capital and interest subsidies
SGST reimbursement
Electricity-related concessions
Reimbursement of stamp duty and registration fees
Capital assistance for projects that set up captive desalination plants
Additional concessions on floor space index, parking, ground coverage, building height and stacking of diesel generators, to make large-scale development easier
Power and water
Data centre operators will have to source at least 51% of their electricity from green and renewable sources. The policy permits open-access procurement of power and provides for transmission infrastructure to ensure reliable supply.
Responding to questions about the large amounts of power and water data centres need, Modhwadia said Gujarat was a power-surplus state and that the government had decided to promote desalinated water, which would then be recycled.
Why it matters
Modhwadia said India stores only a small share of the data it generates, despite accounting for about 20% of global data creation. That makes rapid expansion of domestic data centre infrastructure important as AI adoption accelerates.
The government says the sector could create thousands of direct and indirect jobs, and could trigger "reverse migration" by creating opportunities for Indian technology professionals currently working abroad.
