Gujarat's Mega AI-Era Bet: New Policy Unveiled To Build A 7.5 GW Data Centre Hub

By unveiling its strategy ahead of the national framework, Gujarat has positioned itself early in the race to attract AI, cloud and digital economy investments. Under the policy, the government has set a target of developing 7.5 GW of data centre capacity over the coming years.

₹6 Lakh Crore Investment Expected 

Gujarat Chief Secretary Manoj Kumar Das said the state is well prepared to meet the substantial water and power requirements of data centres, supported by its extensive coastline and abundant renewable energy resources, particularly solar and wind power. He said the new Data Centre Policy is expected to attract investments of around ₹6 lakh crore and create large-scale employment opportunities across the state. According to Das, the anticipated investments will further strengthen Gujarat's position as a high-middle-income economy, in line with the World Bank's classification.

Department of Science and Technology Secretary P. Bharathi said that data centres are no longer merely server storage facilities. They have evolved into the backbone of artificial intelligence (AI), cloud computing, high-performance computing (HPC), digital payments, e-governance, and the broader digital economy. To position Gujarat as an attractive destination for global investors, the government has introduced a comprehensive package of financial and non-financial incentives under the new policy.

Fast-Track Approvals Promised

Deputy Chief Minister and Industries Minister Harsh Sanghavi said that Gujarat is a brand and a guarantee for industries. Data centres require electricity and water, and since Gujarat is able to provide both, the state has become the first choice for such industries. Keeping in view the water requirement, a provision for desalination plants has been incorporated. Dholera is emerging as the country's leading data centre destination. A mechanism is being put in place, in consultation with stakeholders, to ensure faster approvals for land and other necessary clearances.

Sanand & Dholera Semicon Hub

Chief Minister Bhupendra Patel said that GIFT City is already receiving strong momentum under the state's Global Capability Centres (GCC) policy, while Sanand and Dholera are rapidly evolving into major semiconductor hubs. He added that the new Data Centre Policy aims to promote technological excellence while ensuring environmentally sustainable development.

The key objectives of the policy include positioning Gujarat as India's leading Hyperscale AI Data Centre hub, attracting global cloud and AI companies, promoting renewable energy-powered green data centres, strengthening data security and digital self-reliance, developing a skilled workforce in cloud computing, AI and cybersecurity, and building 7.5 GW of data centre capacity across the state.

Gujarat has a slight edge as it has more than 69 GW of installed power generation capacity and more than 5,000 ICT companies. Gujarat is also among India's largest renewable energy-producing states. The state also has more than 5,000 ICT companies and over 12,900 DPIIT-recognised startups, besides a rapidly expanding digital ecosystem in Ahmedabad, Gandhinagar, Surat, Vadodara and Dholera.

Water, Power Supply Benefits

Companies establishing captive desalination plants will receive financial assistance of 20% of capital expenditure, or ₹2 crore per MLD, whichever is applicable. Projects of 1 GW capacity can receive assistance for up to 20 MLD.

The power supply advantages include dual power supply, permission to procure electricity through Open Access, and government assistance for obtaining a distribution licence.

The additional benefits include sub-leasing of land and buildings permitted, round-the-clock water supply, single-window facilitation for all approvals, and online application through the Investor Facilitation Portal.

What Could Change?

The policy is not merely aimed at attracting investments; it is intended to position Gujarat prominently on the global map of AI, cloud computing and digital infrastructure. It is expected to accelerate investments worth thousands of crores, generate high-skilled employment and strengthen the digital ecosystem in Dholera, GIFT City and other industrial regions over the coming years.

States Leading The Race

The States leading the data centre race are Uttar Pradesh, Maharashtra, Tamil Nadu, Karnataka, Haryana, and Andhra Pradesh.

Meanwhile, West Bengal, Rajasthan, Odisha, Jharkhand and Tripura are either drafting dedicated policies or extending incentives for data centre investments.