Andhra Pradesh Strengthens Its Data Centre Push
Andhra Pradesh is strengthening its position in India’s rapidly expanding data centre ecosystem, supported by incentives aimed at lowering the initial investment burden for developers.
According to the S&P Global assessment cited by Financial Express, 19 policies across 11 states were evaluated to understand how attractive their policy frameworks are for data centre investments.
The assessment considered four major areas - electricity incentives, land and capital support, operational and technical support, and regulatory measures including ease of doing business.
AP Leads Second Cluster in Land and Capital Support
Andhra Pradesh has been placed in the second cluster alongside Odisha, Haryana and Karnataka, with these states scoring between 42 and 45.
Importantly, Andhra Pradesh leads this cluster in land and capital support.
The State provides incentives and concessions relating to land costs and capital expenditure, which are intended to reduce upfront costs for companies establishing large data centre facilities.
Such support could become increasingly important as hyperscale data centres require significant investments in land, buildings, power infrastructure, cooling systems and associated facilities.
Which States Lead the Policy Ranking?
Telangana, Maharashtra, Uttar Pradesh and Gujarat form the leading cluster in S&P Global’s assessment, with scores around the 50 mark.
Telangana performs strongly due to competitive electricity tariffs, regulatory incentives and its policy framework, while Maharashtra offers broad support across power, infrastructure and capital investment.
Uttar Pradesh provides incentives across several categories, while Gujarat stands out particularly for electricity-related incentives and ease-of-doing-business measures aimed at large-scale data centre operators.
Andhra Pradesh, Odisha, Haryana and Karnataka form the next group, followed by Rajasthan, Tamil Nadu and West Bengal in the third cluster.
What Makes a State Attractive for Data Centres?
Electricity is one of the most important considerations because data centres require continuous power not only for servers but also for cooling, backup systems and other infrastructure.
Policies assessed by S&P Global therefore include electricity tariffs, renewable power access, banking and wheeling provisions.
Land subsidies, stamp-duty concessions, capital expenditure support and interest-related incentives also influence investment decisions.
Other important factors include single-window approvals, infrastructure readiness, technical facilitation, time-bound clearances and regulatory safeguards.
India Preparing for Massive Data Centre Expansion
India’s data centre industry is expected to expand significantly over the coming years.
According to figures cited in the report, the country’s existing capacity is around 1.5 GW, while approximately 5 GW has already been committed over the next decade. Another 6-7 GW is reportedly in various stages of planning.
The report also cites projections indicating that India’s data centre capacity could reach around 26.3 GW by 2031-32.
S&P Global estimates electricity demand from Indian data centres could grow at a compound annual growth rate of around 18% between 2025 and 2035.
Opportunity for Andhra Pradesh
For Andhra Pradesh, its strong performance in land and capital support provides an important advantage as states compete for new hyperscale and AI-driven infrastructure investments.
With data centres becoming increasingly important to cloud computing, artificial intelligence and digital services, improving electricity incentives, renewable-energy availability, infrastructure readiness and faster regulatory approvals could further strengthen the State’s competitiveness.
Andhra Pradesh’s position in the second policy cluster shows that the State already has a relatively attractive investment framework, while also highlighting opportunities to move closer to India’s leading data centre policy destinations.
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