Gujarat's Data Dream: Rs 6 Lakh Crore Plan Unveiled

The Bhupendra Patel government in Gujarat has unveiled the Viksit Gujarat Data Centre Policy 2026-29, a strategic initiative to establish the state as India's leading hub for data centres. This policy aims to attract approximately Rs 6 lakh crore in investment and develop 7.5 gigawatts (GW) of data-centre capacity, with a significant portion slated for Dholera, a developing smart city. Gujarat anticipates this will bolster cloud services, artificial intelligence, and digital governance.

Dholera is being positioned as a world-class data centre city, supported by infrastructure development including wide roads and a solar park. A Tata semiconductor factory is also under construction. Despite these advancements, substantial development is still planned. The policy offers incentives such as electricity discounts and tax exemptions for large projects (150 MW and above).

A critical challenge for Gujarat, as with other states, is securing adequate water and power. Data centres require substantial cooling, often necessitating large water volumes, and consume vast amounts of electricity. While Gujarat is considered power-surplus, meeting the demand from both semiconductor plants and data centres is a concern. The state plans to utilize seawater for cooling, but the cost and scalability of desalination plants remain key factors.

Gujarat's policy aims for substantial capacity, with proposals already reaching 10 GW, dwarfing India's current 2 GW capacity. This aligns with India's goal to increase its share of global data centre capacity, which is currently low despite generating significant data. The success of Gujarat's ambitious plan hinges on its ability to overcome the logistical challenges of providing consistent power and water supply.