Mangaluru: The State Cabinet meeting chaired by Chief Minister DK Shivakumar in Mangaluru on Friday approved the Karnataka Sustainable Data Centre Policy 2026–2031.
It is a five-year policy framework designed to establish the State as a globally competitive, sustainable and well-connected destination for Data Centre investments.
The policy provides a long-term framework for large-scale digital infrastructure investments, aims to accelerate Karnataka’s readiness for AI and emerging technologies, promote sustainable data centre operations and extend the benefits of the state’s digital economy beyond Bengaluru.
Home, IT-BT Minister Priyank Kharge stated that Karnataka was among the early states to recognise the importance of data centres and create a policy framework to support their growth.
“But the technology landscape has changed significantly, particularly with the rapid growth of AI, and we have also become more conscious of the environmental footprint of this infrastructure. The Sustainable Data Centre Policy is therefore an important course correction — one that allows us to continue attracting the data infrastructure that the digital economy needs, while making sustainability, energy efficiency and responsible use of water central to how we plan and develop this sector,” he said.
The Karnataka Sustainable Data Centre Policy 2026–2031 has a revised budget framework of Rs 1,300.45 crore for its five-year implementation. The policy targets a cumulative data centre IT load of 1 GW by 2031, with an ambition to account for 10–12 per cent of India’s AI-ready data centre capacity.
The policy covers investment across the data centre ecosystem, including data centre units, data centre parks, operators, edge data centres, cable landing stations and allied infrastructure. It also focuses on sustainable development through greater use of renewable energy, energy efficiency, advanced cooling systems, water management and carbon emission mitigation, besides monitoring Power Usage Effectiveness (PUE) and Water Usage Effectiveness (WUE).
The policy provides for next-generation infrastructure to support AI-enabled and intelligent data centres, edge computing, cable landing stations and AI- and quantum-ready facilities. It also proposes a Centre of Excellence for Data Centres and Sustainable Data Centre Zones and Parks to promote applied innovation, research and ecosystem development.
The policy provides comprehensive investment incentives covering capital investment, project establishment, land, connectivity, electricity, green energy, demand centres, research and development, skilling and participation of micro, small and medium enterprises (MSMEs).
It also seeks to promote data centre development beyond Bengaluru by supporting emerging regional corridors and creating a more distributed digital infrastructure ecosystem across Karnataka.
The policy will be implemented through a phased five-year roadmap, beginning with operationalisation of the policy, investor facilitation and identification of data centre zones and parks. This will be followed by ecosystem expansion, R&D, skilling and sustainability-linked incentives, with the long-term objective of strengthening Karnataka’s position as a sustainable data centre hub.
The Department of Electronics, Information Technology, Biotechnology and Science & Technology will anchor the implementation. The Karnataka Innovation and Technology Services (KITS) will serve as the registration and policy implementation interface for eligible entities, while Karnataka Udyoga Mitra (KUM), under the Department of Commerce and Industries, will act as the single-window agency for clearances of data centre proposals.
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