Policy targets 1 GW of cumulative Data Centre IT load and 10–12% of India’s AIready Data Centre capacity by 2031

The Government of Karnataka has approved the Karnataka Sustainable Data Centre Policy 20262031, a five-year policy framework designed to establish the State as a globally competitive, sustainable and well-connected destination for Data Centre investments. The policy seeks to strengthen Karnataka’s digital infrastructure backbone at a time when the rapid growth of Artificial Intelligence, cloud computing, IoT, 5G, Global Capability Centres (GCCs), FinTech and other emerging technologies is driving unprecedented demand for computing capacity.

The policy brings together investment facilitation, digital infrastructure, sustainability and ecosystem development, with a focus on attracting domestic and international investments across the Data Centre value chain. It also seeks to expand Data Centre infrastructure beyond Bengaluru, strengthening emerging regional digital corridors and supporting Karnataka’s broader Beyond Bengaluru vision.

Shri Priyank Kharge, Hon’ble Minister for Home, Information Technology, Biotechnology, and EGovernance, Government of Karnataka, said “Karnataka was among the early states to recognise the importance of data centres and create a policy framework to support their growth. But the technology landscape has changed significantly, particularly with the rapid growth of AI, and we have also become more conscious of the environmental footprint of this infrastructure. The Sustainable Data Centre Policy is therefore an important course correction — one that allows us to continue attracting the data infrastructure that the digital economy needs, while making sustainability, energy efficiency and responsible use of water central to how we plan and develop this sector.”

“Our objective is not simply to add more capacity, but to build the right capacity, in the right locations and with the right infrastructure. This means greater use of renewable energy, newer cooling technologies, better water management and stronger connectivity, while also creating opportunities beyond Bengaluru. Karnataka has the technology ecosystem and talent to lead India’s next phase of digital infrastructure, and this policy is designed to ensure that this growth is both globally competitive and sustainable.”

Key Highlights of the Karnataka Sustainable Data Centre Policy 2026–2031 • ₹1,300.45 crore revised budget framework for implementation of the five-year policy.

GW cumulative Data Centre IT load by 2031, with an ambition to account for 10–12% of India’s AI-ready Data Centre capacity.

• Investment across the Data Centre ecosystem, including Data Centre Units, Data Centre Parks, Data Centre Operators, Edge Data Centres, cable landing stations and allied infrastructure.

• Sustainable Data Centre development, with emphasis on renewable energy adoption, energy efficiency, advanced cooling, water management, carbon emission mitigation, and monitoring of Power Usage Effectiveness (PUE) and Water Usage Effectiveness (WUE).

• Next-generation infrastructure supporting AI-enabled and intelligent Data Centres, edge computing, cable landing stations, and AI- and quantum-ready facilities.

• Centre of Excellence for Data Centres and Sustainable Data Centre Zones/Data Centre Parks to strengthen applied innovation, research and ecosystem development.

• Data Centre Resource Heat Mapping to enable evidence-based planning around water and energy availability and support sustainable site selection.

• Comprehensive investment incentives covering capital investment, project establishment, land, connectivity, electricity, green energy, demand centres, R&D, skilling and MSME participation.

• Support for Data Centre development beyond Bengaluru, including emerging regional corridors, helping create a more distributed digital infrastructure ecosystem across the State.

• Strengthening the Data Centre value chain, with support for local manufacturing, MSME participation, R&D and skilled employment in Data Centre design, construction, operations and maintenance.

• Performance-linked sustainability incentives to encourage efficient power and water usage and the adoption of sustainable operating practices.

Implementation The policy will be implemented through a phased five-year roadmap, beginning with policy operationalisation, investor facilitation and identification of Data Centre Zones and Parks, followed by ecosystem expansion, R&D, skilling, sustainability-linked incentives and consolidation of Karnataka’s position as a sustainable Data Centre hub.

The Department of Electronics, Information Technology, Biotechnology and Science & Technology will anchor implementation, with KITS serving as the registration and policy implementation interface for eligible entities. Karnataka Udyoga Mitra (KUM), Department of Commerce & Industries, will serve as the Single Window Agency for clearance of Data Centre proposals.

The Karnataka Sustainable Data Centre Policy 2026–2031 provides a long-term framework to support large-scale digital infrastructure investments, accelerate the State’s AI and emerging technology readiness, promote sustainable Data Centre operations and extend the benefits of Karnataka’s digital economy across the State.