A second cluster of states, scoring between 42 and 45, comprises Odisha, Haryana, Andhra Pradesh, and Karnataka. In this group, Andhra Pradesh leads overall in land and capital support benefits, while Karnataka features notable EoDB measures, including an Essential Services Maintenance Act cushion.
Telangana has emerged as the state offering the most attractive policy package for data centres in India, backed by strong electricity and regulatory incentives, while Maharashtra and Uttar Pradesh have formulated balanced frameworks with extensive packages covering power, infrastructure, capital, and regulatory mechanisms, according to a report by S&P Global.
Gujarat has established the most lucrative electricity and ease of doing business measures focused on drawing hyperscalers, placing all four leading states at scores of around 50 out of 100 on S&P Global Energy’s Data Center Policy Attractiveness India (DCPAI) index, the report, titled ‘India Forward: Reimagining Growth’, stated.
The index evaluated 19 state policies — spanning Information Technology (IT), IT-enabled services (ITeS), data centres, and Global Capability Centres (GCCs) — across 11 states enacted since 2016. The rankings were assessed on four core incentive categories: electricity, land and capital, operational and technical support, and regulatory and Ease of Doing Business (EoDB) frameworks.
A second cluster of states, scoring between 42 and 45, comprises Odisha, Haryana, Andhra Pradesh, and Karnataka. In this group, Andhra Pradesh leads overall in land and capital support benefits, while Karnataka features notable EoDB measures, including an Essential Services Maintenance Act cushion.
Odisha and Haryana’s strategies focus on broad-based incentives spanning the entire project life cycle.
The third cluster, scoring between 30 and 40, includes Rajasthan, Tamil Nadu, and West Bengal. While Tamil Nadu performs strongly on capital expenditure support, including captive renewable energy infrastructure, both Tamil Nadu and West Bengal scored lower on electricity sector incentives.
According to S&P Global Energy, “competitive federalism” is driving states to offer targeted fiscal incentives, streamlined clearances, and reliable clean power as data centres emerge as a distinct, critical infrastructure asset class.
This interstate competition comes amid a massive expansion in the sector. India’s existing data centre capacity — from enterprise collocated and dedicated facilities — stands at about 1.5 gigawatts (GW).
Over the next decade, 5 GW of capacity has already been committed, with an additional 6-7 GW announced or in the early stages of planning. Citing official parliamentary projections, the report noted that overall capacity is expected to surge to 26.3 GW by the 2031-32 fiscal year.
Consequently, the total electricity demand from Indian data centres, including heating, ventilation, air conditioning, and operational loads, is estimated to grow at a compound annual growth rate (CAGR) of 18 per cent between 2025 and 2035, the report added.
“As the global security and trade landscapes shift once again, India’s geopolitical strategy is likely to need recalibration. It will remain grounded in the principle of strategic autonomy, with an adjustment toward asymmetric hedging rather than broad-based multi-alignment.
“The country needs actionable ways to maximise diplomatic leverage, secure access to new markets and resources, and create domestic conditions to manage global competition,” the report said
