Uttar Pradesh is set to become a green, AI-ready and globally competitive data centre hub. 

The Uttar Pradesh Cabinet on Monday approved the Uttar Pradesh Data Center Policy 2026. Under the policy, the state aims to attract more than Rs 2 lakh crore in investments and develop an additional 2 Gigawatts (GW) of data centre capacity. “The objective of the policy is to develop Uttar Pradesh as a Green, AI-ready, and globally competitive Data Center hub,” UP Government noted.

About UP Data Center Policy

Uttar Pradesh Data Center Policy 2021 was introduced in January 2021, which was later amended in November 2022. This policy expired on January 27, following which the government has introduced the new Uttar Pradesh Data Center Policy-2026. 

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“Under the Uttar Pradesh Data Center Policy-2021, out of 6 Data Center Parks and 2 Data Center units with a capacity of less than 40 Megawatts involving an investment of approximately Rs 21,343 crore, 7 projects have already become operational,” the minister said. 

Focus on GPU-based facilities 

IT and Electronics Minister Sunil Sharma said the new policy gives special importance to GPU-based infrastructure, energy efficiency and sustainable development.

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“The new policy places special emphasis on GPU-based infrastructure, energy efficiency, and sustainable development. In addition, extra incentives have been proposed for the Bundelkhand and Purvanchal regions. The policy includes provisions such as incentives for Tier/Rating-3 and 4 Data Centers, AI Compute Booster incentives, and Green and Sustainable Operations incentives,” Sharma said.

The government has proposed additional incentives for projects in Bundelkhand and Purvanchal to encourage investments in these regions.

Employment and investment targets

The state government expects the policy to create a world-class data centre ecosystem in Uttar Pradesh. It believes the development of data centres will also attract information technology and other IT-enabled businesses, creating more jobs.

According to the government, the policy aims to generate long-term direct employment for around 7,500 people. It is also expected to create about 50,000 short-term direct jobs during the construction phase of data centre projects.

Uttar Pradesh, Telangana lead investments

According to a recent report by JM Financial released on July 6, Uttar Pradesh and Telangana are currently attracting the highest level of data centre investments and workload commitments.

However, Maharashtra remains India’s most mature data centre market and is likely to announce more incentives to retain its leadership.

JM Financial estimates that the country’s data centre capacity could reach 8.5-9.5 GW by 2030, up from around 2.5 GW currently. Data centre demand is also expected to grow to 7-8 GW by 2030, nearly three times the current level. “ Our estimate suggests that India’s data centre capacity could reach 8.5–9.5GW by 2030, accounting for 7–8% of incremental peak power demand,” noted JM Financial.