Gujarat rolled out its first dedicated data centre policy on July 9. Chief Minister Bhupendra Patel unveiled the "Viksit Gujarat – Data Centre Policy 2026-29" at Mahatma Mandir in Gandhinagar. The government says it has already received proposals from roughly 14 companies and is targeting more than Rs 6 lakh crore in investment in the policy’s first phase, with a target of building up to 8 gigawatts (GW) of data centre capacity in the state.
Why now, and why Gujarat
Every large language model query, cloud workload and streaming request ultimately runs on racks of servers that need power, cooling and fibre connectivity at industrial scale. States with reliable electricity, port access and available land are competing to host that infrastructure. Gujarat is drawing on what it already has: GIFT City’s financial-services base, coastal power plants and large tracts of undeveloped land near Ahmedabad. DD India’s coverage of the launch reported that Deputy Chief Minister Harsh Sanghavi, Science and Technology Minister Arjun Modhwadia and Chief Secretary Manoj Kumar Das attended alongside technology-sector representatives.
The policy names Dholera, the planned smart city about 100 km from Ahmedabad, as a candidate to become what officials called the "world’s largest data centre city," citing its airport access and a planned semi-high-speed rail link. Dholera has been pitched before as a hub for semiconductors and manufacturing, with occupancy consistently trailing the announcements. Residents who have watched those earlier plans stall have reason to treat this one with the same caution, at least until construction starts.
The fine print that matters
Two conditions in the policy affect Gujarat residents more directly than the investment headline. Developers must source at least 51% of their electricity from green energy, a real constraint given how much power a single data centre campus can draw, often comparable to a mid-sized town. The policy also requires that cooling water come from desalination plants rather than existing agricultural or municipal supply, a direct response to complaints in the US and parts of India that data centre buildouts have strained local water tables and competed with farmers for scarce supply.
Incentives on offer include capital and interest subsidies, power tariff support, SGST reimbursement, electricity duty waivers and stamp duty exemptions. Gujarat used a similar package to draw semiconductor and EV manufacturing investment in recent years.
What it means for Gujarat
If even a fraction of the proposed 7.5 to 10 GW of interest gets built, most residents will feel it indirectly: construction jobs, demand for technicians to run and maintain the facilities, and tax revenue for the state. The bigger question is execution. Large data centre announcements routinely see only part of the proposed capacity actually constructed, and the desalination and green-power mandates, sound policy on their own, add cost and construction time that could slow how much of this investment shows up on the ground.
Outlook: Watch for the first signed land allotments in Dholera and early construction milestones over the coming months. Those will tell residents more about real momentum than the proposal count does. Also worth tracking: whether Gujarat’s power grid, which has been separately expanding renewable transmission capacity in Kutch, can support the round-the-clock demand data centres require.
Sources: Free Press Journal, DD India
This report was compiled and written with AI assistance from publicly reported sources, and reviewed for accuracy.