Inside UP's Data Centre Policy 2026: AI, Investment and Growth

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The Uttar Pradesh Cabinet recently approved the UP Data Centre Policy 2026, laying out an ambitious roadmap to transform the state into a green, AI-ready, and globally competitive data centre hub.

Building on the momentum of the 2021 policy, the new framework seeks to attract large-scale investments, strengthen digital infrastructure, and position Uttar Pradesh at the forefront of India’s fast-growing artificial intelligence and cloud computing ecosystem.

Investment and capacity targets

At the heart of the policy are two ambitious goals:

creating an additional 2 GW of data centre capacity and
mobilising investments exceeding Rs. 2 lakh crore

These investments are expected to significantly expand the state’s digital infrastructure while supporting UP’s broader vision of becoming a $1 trillion economy.

The government also estimates that the policy could generate around 50,000 indirect employment opportunities while encouraging the growth of information technology (IT) and IT-enabled industries around data centre clusters.

Focus on AI, GPU infrastructure, and sustainability

One of the key features of the new policy is its emphasis on artificial intelligence-ready infrastructure.

Special incentives have been introduced to encourage the development of Graphics Processing Unit (GPU)-based data centres, which are critical for AI workloads, machine learning, and high-performance computing.

The policy also promotes the establishment of AI research clusters, High Performance Computing (HPC) infrastructure, and innovation incubators within data centre corridors, strengthening Uttar Pradesh’s position as a hub for advanced computing.

Sustainability is another key pillar. The policy encourages the development of Tier III and Tier IV certified data centres, green-certified facilities and aims for at least 50% renewable energy adoption in new data centres by 2030, supported by the gradual adoption of green technologies.

Balanced regional development

To ensure that growth extends beyond major urban centres, the government has announced additional incentives for Bundelkhand and Purvanchal. These measures are expected to attract investments to relatively underdeveloped regions while creating new economic opportunities and improving regional digital infrastructure.

State IT and Electronics Minister Sunil Sharma said the policy also includes AI Compute Booster incentives and Green and Sustainable Operations incentives, reinforcing the state’s commitment to next-generation digital infrastructure.

Building on an established foundation

The new policy builds upon the achievements of the UP Data Centre Policy 2021, which helped establish Uttar Pradesh as one of India’s leading destinations for data centre investments. According to the government, seven projects have already become operational under the previous policy, out of six data centre parks and two standalone units involving investments of nearly Rs. 21,343 crore.

With its strong focus on AI, sustainability, regional development, and world-class infrastructure, the UP Data Centre Policy 2026 signals the state’s intent to become one of India’s most competitive destinations for digital infrastructure and technology investments.