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Data Centres: Boom and Backlash
14AUG

Gujarat pays for 7.5 GW of capacity

2 min read
10:48UTC

Gujarat notified a data-centre policy on 7 August targeting 7.5 GW of capacity against a 74 GW installed power base, with subsidies conditional on projects sourcing at least 51% green power.

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Key takeaway

Gujarat subsidises data centres that source at least 51% green power, targeting 7.5 GW.

Gujarat notified its Data Centre Policy 2026-29 on 7 August, targeting 7.5 GW of capacity against a 74 GW installed power base, with capital and interest subsidies, SGST reimbursement (the state share of India's Goods and Services Tax), electricity-duty reimbursement, desalination assistance and stamp-duty exemption, conditional on projects sourcing at least 51% green power. The policy names Dholera Special Investment Region as the primary hub. The direct government fetch was blocked and the detail rests on wire corroboration 1.

Set the two power figures beside each other and the ambition is plain: the target would add roughly a tenth to Gujarat's entire existing power system for one industry alone. Dholera is the state's greenfield industrial city on the Gulf of Khambhat, already the site of India's semiconductor fabrication push, so the policy stacks chip manufacturing and compute on the same grid and the same desalinated water.

The 51% clause is the condition Gujarat attaches instead of a bill. Where six US grid operators told their federal regulator in July that current rules cannot serve the queue at all , the Indian state has chosen the opposite lever, paying developers to come and pricing the green obligation into the subsidy rather than into the connection. Whether 7.5 GW of firm renewable supply can be built to match is the question the policy leaves open.

Deep Analysis

In plain English

Gujarat, an Indian state, published a new policy on 7 August offering data-centre developers a package of tax breaks and subsidies, but only if their project runs on at least 51% green power. The state wants to add 7.5 GW of data-centre capacity, roughly a tenth of its current total power supply, and has named the Dholera Special Investment Region as the main place it wants that capacity built.

First Reported In

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Government of Gujarat· 14 Aug 2026
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