State Data Centre Policies

Imagine several state governments realising that a single hyperscale data centre project can bring thousands of crores in investment, hundreds of construction and permanent jobs, and a durable new property and power tax base, all without the environmental or political complications of, say, a large chemical plant, and deciding to compete aggressively against each other to attract exactly that kind of project. That's precisely what's happened across Indian states over the past several years.

Tamil Nadu's Data Centre Policy, applicable to projects incorporated through March 2026, offers a genuinely substantial package, a Rs 500 crore incentive pool, 50 to 100% stamp duty concessions depending on district category, land cost subsidies in less-developed districts, and a full power tax subsidy for five years, conditional on projects investing over Rs 500 crore and meeting at least 30% renewable energy sourcing.

Maharashtra and Uttar Pradesh run their own competing packages, Maharashtra offering up to 60% electricity duty exemption for 15 years under its 2023 IT-ITES policy, and Uttar Pradesh offering land cost subsidies and streamlined approvals under its 2021 policy, amended in 2022, specifically designed to attract the large hyperscale facilities covered elsewhere on this site.

A draft National Data Centre Policy, 2025, now aims to layer a unified central framework on top of this state-by-state competition, proposing up to 20 years of conditional tax exemptions, full electricity duty exemption, single-window clearances, and dedicated Data Centre Economic Zones with pre-allocated land near IT corridors, an attempt to coordinate rather than compete with the state incentive packages that have driven investment decisions until now.