₹6 lakh crore ($72 billion) and 7.5 gigawatts in targets put Gujarat in competition with Telangana, Karnataka, and Tamil Nadu — and trigger a southern response that's now near certain.
Gujarat on Wednesday became the latest Indian state to enter India's data centre subsidy race, unveiling a dedicated 2026-29 policy framework that targets ₹6 lakh crore (about $72 billion) in investment and 7.5 gigawatts of capacity. By comparison, the pipeline of upcoming Indian data centres was tracked at just over $23 billion as of early 2025 (ResearchAndMarkets via GlobeNewswire).
Chief Minister Bhupendra Patel launched the Gujarat Data Centre Policy 2026-29 in Gandhinagar, the state capital, tying the announcement to Prime Minister Narendra Modi's broader digital-economy push (IANS; The Hindu). Deputy CM Harsh Sanghavi and senior state officials joined the Gandhinagar event. The ₹6 lakh crore and 7.5 gigawatt figures are policy window targets rather than signed agreements, and the full policy text has not yet been disclosed.
Telangana, Karnataka, and Tamil Nadu have spent the past five years assembling incentive stacks covering land, power tariffs, stamp duty exemptions, and capital subsidies to attract global cloud and AI operators. India's pipeline of planned data centres was tracked at just over $23 billion as of early 2025 (GlobeNewswire). Gujarat's entry formalises that competition and pushes each of those states to either match the new terms or accept lost ground (Hindu Business Line).
A 20-year tax holiday Patel cited is a Union Budget measure, not a Gujarat-specific provision (The Hindu; Hindu Business Line). The state policy functions as the layer on top: site selection, power allocation, single-window clearance, and the bureaucratic speed Gujarat can offer an operator trying to break ground within an 18-month window. The central tax break is the headline financial lever. Gujarat adds operability, power allocation efficiency, and a pre-existing operator footprint anchored by the previously announced Reliance facilities.
Reliance Industries has separately announced a gigawatt-scale AI data centre in the state, and a Reliance-Meta joint venture has disclosed a 168 MW hyperscale facility. Both predate the policy and shaped the kind of operator Gujarat's framework is plainly calibrated for: large AI and cloud tenants rather than retail colocation. Those earlier commitments are why Gujarat looked credible as a data centre destination before the cabinet finished drafting its incentive stack.
The policy text has not been published, which leaves several concrete questions unanswered. Indian data centre demand will need sustained power, land, and water allocations in districts where current industrial users already compete for the same grid capacity and cooling water. Without specifics on per-megawatt power tariffs, capex subsidy ceilings, eligibility criteria distinguishing hyperscale from edge facilities, or renewable energy purchase obligations, the ₹6 lakh crore and 7.5 gigawatt targets read as an aspirational ceiling rather than a committed floor. Coverage so far, including the launch wire and the state press write-up, stops at the announcement.
Telangana and Karnataka have established the leading state-level data centre footprints and will not surrender share without revising their own incentive stacks. Gujarat's policy launch is the trigger that makes a southern response near-certain over the next state budget cycle. The first concrete test will be how Telangana frames its own data centre policy revision when its next state budget is tabled.