Karnataka launches sustainable data centre policy 2026–2031

Karnataka, a key technology hub in India, has officially approved its Sustainable Data Centre Policy for the period 2026–2031. This five-year plan aims to achieve 1 gigawatt (GW) of cumulative data centre IT capacity by 2031 and secure a 10–12% share of India’s AI-ready data centre capacity.

The policy, backed by a budget framework of Rs 1,300.45 crore (approximately $156 million), links incentives to areas such as power and water efficiency. The move comes as demand for computing capacity surges due to advancements in AI, cloud computing, 5G, the Internet of Things (IoT), and global capability centers. The plan also seeks to expand data centre infrastructure beyond the state capital, Bengaluru.

Key initiatives under the new policy include the establishment of "Sustainable Data Centre Zones," a "Center of Excellence," and new data centre corridors outside Bengaluru. Site selection will be guided by resource mapping, considering power and water availability. The scope covers data centres, edge facilities, cable landing stations, and infrastructure for AI and quantum computing. Incentives will be offered for capital investment, land, power, connectivity, renewable energy, research and development, and participation from local workforce and MSMEs.

"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," stated IT/BT Minister Priyank Kharge. The targets address a broader challenge for India's expanding data centre sector, which had an estimated total capacity of approximately 1,575 MW as of August.

The policy will be implemented in phases over five years, with the Department of Electronics, Information Technology, Biotechnology and Science & Technology leading the execution.