Karnataka’s cabinet has approved the Sustainable Data Centre Policy 2026–31, targeting 1 GW of cumulative data centre IT capacity by 2031 and aiming for a 10–12% share of India’s AI-ready data centre capacity. The policy has a budget framework of Rs 1,300.45 crore and focuses on power and water efficiency incentives, according to medianama.com.
The five-year policy proposes creating Sustainable Data Centre Zones, a Centre of Excellence, and new data centre corridors outside Bengaluru. It uses resource heat mapping to select locations based on power and water availability. The policy covers data centre units, edge data centres, cable landing stations, and infrastructure for AI and quantum computing. Incentives are linked to capital investment, land, electricity, connectivity, renewable energy, research and development, skilling, and MSME participation.
This policy responds to rising demand for computing capacity driven by AI, cloud computing, 5G, IoT, fintech, and global capability centres. It aims to expand data centre infrastructure beyond Bengaluru and promote local manufacturing and employment in data centre design, construction, operations, and maintenance. Energy and water use monitoring through Power Usage Effectiveness and Water Usage Effectiveness metrics are central to the policy’s sustainability goals.
The Karnataka government plans to implement the policy over five years, with the target of reaching 1 GW of IT capacity by 2031 and securing a 10–12% share of India’s AI-ready data centre market, as detailed on medianama.com.