The UP Cabinet, chaired by Chief Minister Yogi Adityanath on Monday, approved the Data Center policy.
The Uttar Pradesh (UP) Data Center Policy-2026’s focus on artificial intelligence (Al)-ready capacity, Graphics Processing Unit (GPU) infrastructure, sustainability and regional development sends a strong signal to the market and will help unlock the next wave of investments, analysts said on Tuesday.The UP Cabinet, chaired by Chief Minister Yogi Adityanath on Monday, approved the Data Center policy. The earlier policy had expired on January 27 this year, following which the government decided to introduce the new one with an aim to develop the State as a green and AI-ready data center hub with an additional capacity of 2 Gigawatts.Bundelkhand and Purvanchal will receive additional incentives, investment target of over ₹2-lakh crore, the UP government said adding that there is a possibility of indirect employment for around 50,000 people under policy.“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,” IT and Electronics Minister, Uttar Pradesh, Sunil Sharma, said.The Yogi government had implemented the UP Data Center Policy-2021 in January 2021, which was subsequently amended on November 7, 2022. Under the UP Data Center Policy-2021 (First Amendment-2022), out of six Data Center Parks and two Data Center units with a capacity of less than 40 Megawatts involving an investment of around ₹21,343 crore, seven projects have already become operational, Sharma added.“The next priority should be swift implementation, robust power and connectivity infrastructure, and close collaboration between government and industry to translate these ambitions into scalable capacity and long-term economic value,” Shalini Dawar, Partner and Leader, Data Center at EY- Parthenon, told businessline.Al adoptionShe added as India is entering a new phase of Al adoption and is poised to become one of the world’s fastest-growing markets for Al infrastructure. While strong commitments from hyperscale cloud providers, data centre operators and financial investors are already driving momentum, policy support is essential to accelerate deployment at scale, reduce investment friction and create globally competitive infrastructure ecosystems.“UP has already proved its mettle in mobile manufacturing. It has the Samsung’s largest plant, so does it have plants of Vivo, Oppo, and others...This proven track record definitely puts UP ahead of many other States. It has the scale to offer as well as record to show. The data centre story will further give it an impetus and help UP emerge as a strong State on the technology and digital pathways,” Faisal Kawoosa, Chief Analyst and Founder at Techarc, said.According to Piyush Somani, Promoter, Managing Director and Chairman, ESDS Software Solution, this strategic initiative has the potential to catalyse an entire digital economy by attracting large-scale investments, accelerating innovation and generating high-value employment across cloud computing, AI and advanced digital infrastructure.“More importantly, it lays the foundation for developing a future-ready talent ecosystem that will further strengthen India’s global digital competitiveness. With these critical enablers in place, Uttar Pradesh has positioned itself as one of the country’s compelling destinations for digital infrastructure investment,” Somani said.“So far, we have seen North as a region lagging where Southern States had taken lead, but UP now seems to be changing this perception, which is good not only for the State but for the entire region. It helps creation of jobs for neighbouring States also,” Kawoosa of Techarc said.Published on July 7, 2026
