Deputy Chief Minister Harsh Sanghavi on Thursday invoked India's decades-long struggle to build a semiconductor industry as a cautionary lesson, unveiling the 'Viksit Gujarat – Data Centre Policy 2026-29' in Gandhinagar with a stated capacity target of 7.5 GW. The policy, launched by Chief Minister Bhupendra Patel, makes Gujarat the first state in India to formally adopt a dedicated data centre framework, according to the state government.

A History of Missed Semiconductor Targets

Sanghavi traced India's semiconductor failures across three distinct episodes. He noted that a Cabinet decision on a semiconductor mission was taken as far back as 1976, but the initiative had collapsed by 1990. A second attempt between 2006 and 2009 saw plans drawn up for a semiconductor park in Hyderabad, only for those ambitions to dissolve as well.

'Yet again, the dreams of the semiconductor mission faded away. In 2009, the land meant for that semiconductor park was converted into real estate,' Sanghavi said. He framed these historical failures as the precise context against which Gujarat's current policy push should be judged.

Gujarat's Recent Semiconductor Gains

Sanghavi argued that the semiconductor landscape had shifted materially since the mission was revived in 2021. He said Gujarat had emerged as a primary beneficiary of that revival, pointing to a rapid pace of facility inaugurations.

'Since 2025, whether it is several semiconductor fabs in the country or the inauguration of OSAT facilities, within just four months, more than three semiconductor OSAT facilities have been inaugurated on the soil of Gujarat,' he said. The deputy chief minister credited the state's execution capacity — under what he described as the leadership of Prime Minister Narendra Modi and the guidance of Chief Minister Patel — for this acceleration.

What the Data Centre Policy Offers

The Viksit Gujarat Data Centre Policy 2026-29 provides a package of fiscal and non-fiscal incentives targeting hyperscale data centres and AI infrastructure. These include capital subsidies, power tariff support, tax reimbursements, and provisions encouraging renewable energy adoption and sustainable water use.

Notably, Sanghavi claimed that investor demand had already outpaced the policy's initial capacity target. 'Across the whole of Gujarat, the policy being launched today has already generated demand for nearly double that capacity,' he said, adding that leading companies from India and abroad had submitted request letters seeking to establish data centres at various locations across the state.

Why This Matters for India's Digital Infrastructure

The timing of the policy aligns with a surge in demand for AI computing and cloud services, both of which require significant data centre capacity. Gujarat's move positions it ahead of other states that have spoken about data centre ambitions without formalising policy frameworks, according to Sanghavi.

This is also the broader context: India is navigating a critical window in which global technology companies are actively scouting locations for large-scale data infrastructure investment. A state-level policy with defined incentives — arriving before competitors formalise theirs — could give Gujarat a structural first-mover advantage in attracting those commitments.

Whether investor interest translates into ground-level deployment at the scale claimed will be the defining test of the policy's credibility in the months ahead.