The Indian state government of Tamil Nadu has launched a new data center policy.

The government will provide power, land, and connectivity incentives to support new data centers, chief minister MK Stalin said. But to receive the incentives, projects must involve an investment of over ₹500 crore ($66.5 million) and meet at least 30 percent of their energy requirements with renewable energy sources.

Tiruchirappalli, Tamil Nadu
– Thinkstock

The policy applies to data centers incorporated from April 1, 2021, to March 31, 2026.

Facilities will be able to buy power from the state-owned Tamil Nadu Generation and Distribution Corporation (Tangedco), and get 100 percent subsidy on the tax on that energy for five years.

Data centers in districts classified as A or B, companies will get 50 percent off stamp duty. In category C regions, they will get 100 percent stamp duty exemptions, and can get a 50 percent subsidy on land cost.

Last week, chief minister MK Stalin signed six Memoranda of Understanding with data center companies including Adani Enterprises, L&T, STT GDC, CtrlS, and Bharti Airtel’s Nxtra.

“The policy addresses critical factors of considerations such as power connections, multi-level stacking of generators and car parking provisions, among other things, along with single-window clearances and stamp duty concessions," Jerry Kingsley, senior director, capital markets and data center advisory at JLL, said. "The policy also promotes investments in tier-2 and tier-3 cities and green building data centers with incentives."

JLL expects data center capacity in India to double between H1 2021 and 2023, jumping from 499MW to 1,008MW.

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