Gujarat unveils data centre policy to attract AI investments; State offers capital, power and tax incentives

Gandhinagar: The Gujarat government on Thursday launched its Data Centre Policy to attract hyperscale AI investments and position the state as India's leading data centre hub.

To accelerate investment and ensure competitiveness under this policy, it offers a comprehensive package of fiscal and non-fiscal incentives. These include a capital subsidy of 2.5% on eligible fixed capital investment in the Dholera region, claimable within ten years, and an interest subsidy of up to 4% on term loans for ten years, capped at ₹25 crore annually.


Long-term operational savings under the same are ensured through a ₹1 per unit power tariff subsidy for twenty years, alongside 100% exemptions on stamp duty and registration fees for land transactions, and full reimbursement of electricity duty for twenty years.

The policy further provides SGST reimbursements on plant and machinery, building infrastructure, and eligible services for up to 20 years, reducing the tax burden and encouraging reinvestment. To facilitate hyperscale-ready infrastructure, special building norms allow relaxations in FSI, parking, ground coverage, and technical provisions. Sustainability is supported through capital assistance for captive desalination plants, while non-fiscal benefits include dual power feeders, open access permissions, and facilitation for distribution licenses.

Additionally, approvals are streamlined through a single-window clearance system via the Investor Facilitation Portal and DST Incentive Management Portal, ensuring ease of doing business and faster project execution. All projects availing incentives must source at least 51% of electricity from renewable energy, reinforcing Gujarat's commitment to green growth. Incentives are capped at 75% of eligible fixed capital investment, disbursed over 20 years, ensuring balanced and sustainable support.

The policy offers a comprehensive package of fiscal incentives, including capital subsidy, interest subsidy, power tariff subsidy, SGST reimbursement, electricity duty reimbursement, support for desalination plants, and stamp duty exemptions. It also provides non-fiscal incentives such as fast-track approvals, additional floor space index (FSI), relaxations in building norms, open access to power, assured electricity supply, and water availability to accelerate project execution.