Maharashtra Data Centre Policy 2023: Building India’s Data Centre Capital

Policy Update

Shailja Singh

Background

Maharashtra has emerged as India’s leading data centre market, supported by Mumbai’s strategic location, submarine cable landing infrastructure, established financial and technology ecosystem, skilled workforce and relatively strong power and connectivity infrastructure. The state’s data centre framework is primarily embedded in the Maharashtra Information Technology and Information Technology Enabled Services (IT & ITeS) Policy 2023, rather than being a separate standalone data centre policy. Notified on 27 June 2023, the policy identifies data centres as an important component of Maharashtra’s wider technology ecosystem and seeks to promote investment, employment, exports and balanced regional development [1].

The policy specifically aims to position Mumbai and Navi Mumbai as major data centre hubs. Maharashtra’s existing advantages include its submarine cable landing stations, reliable electricity infrastructure and established technology ecosystem. The state’s IT & ITeS Policy 2023 noted that Maharashtra had more than 700 MW of data centre IT power capacity in 2021, accounting for a substantial share of India’s data centre infrastructure at the time [1].

The policy was introduced amid increasing demand for cloud computing, digital payments, 5G, artificial intelligence (AI), enterprise computing and secure data storage. To address the infrastructure requirements of this expanding digital economy, the state introduced a combination of fiscal incentives, infrastructure support and regulatory facilitation. These include stamp duty exemptions, electricity-duty concessions, industrial electricity tariffs, uninterrupted power supply, open-access electricity, additional Floor Space Index (FSI), infrastructure status and water-supply arrangements [1].

An important development came on 9 October 2024, when the Maharashtra government introduced the Green Integrated Data Centre Park framework through Government Resolution No. MATANDHO-2024/C.R.138/Industry-2. The framework initially provided for three large integrated green data centre parks, with a minimum capacity of 500 MW and minimum fixed capital investment of ₹30,000 crore per project. Eligible parks were required to use 100% green energy for core data centre operations and meet environmental-efficiency requirements, including Power Usage Effectiveness (PUE), Carbon Usage Effectiveness (CUE) and at least LEED Silver building standards [2].

The framework subsequently underwent changes in June 2026. According to reporting on the revised government resolution, the number of eligible projects was expanded from three to 20, while the mandatory green-energy requirement for core operations was reduced from 100% to 51%. The geographical scope was also extended beyond the Mumbai Metropolitan Region (MMR) to cover the entire state [3]. These changes indicate a shift towards expanding investment opportunities while reconsidering the practical requirements of renewable-energy availability.

Functioning

The 2023 policy combines financial incentives with infrastructure and regulatory facilitation to encourage the establishment and expansion of data centres.

Under the original policy framework, registered data centres receive 100% stamp duty exemption on eligible transactions involving land and premises. The policy also provides permanent electricity-duty exemption for registered data centre units, subject to its eligibility provisions. Additionally, new data centres outside Zone-I are eligible for a power tariff subsidy of ₹1 per unit for five years, while registered facilities receive electricity at industrial tariffs [1].

The policy also provides flexibility in land use and infrastructure development. Data centres are permitted in different land-use zones, including residential, no-development and green zones, subject to applicable planning regulations. The framework provides for additional FSI and relaxed parking requirements, recognising the specialised infrastructure requirements of these facilities. It also envisages essential-services treatment to support uninterrupted operations [1].

Power reliability is particularly important because electricity represents a major operational requirement for data centres. The policy therefore provides for continuous electricity supply, open-access power procurement and facilitation of captive renewable-energy arrangements. It also assigns the Maharashtra Industrial Development Corporation (MIDC) a role in developing data centre parks with essential infrastructure, including roads, electricity, connectivity and water supply [1].

The Maharashtra Information Technology Interface (MAHITI) portal is envisaged as a unified single-window mechanism for applications, registrations, incentives and time-bound clearances. The policy also establishes an Empowered Committee at the state level to monitor implementation, review progress and address coordination-related challenges across departments [1].

The 2024 Green Integrated Data Centre Park framework introduced additional investment-linked incentives. Apart from the existing policy benefits, eligible projects received a 20-year electricity-duty exemption, a ₹1-per-unit subsidy on green electricity for ten years in Zone-I and incentives equivalent to 100% of eligible gross State Goods and Services Tax (SGST) on specified plant and machinery, operational expenditure and construction-related expenditure, subject to policy conditions. The framework also provided for dedicated power infrastructure and other supporting facilities [2].

The original 2024 framework was restricted to three eligible projects, with a minimum capacity of 500 MW and fixed capital investment of ₹30,000 crore each. The subsequent 2026 revision broadened the framework to accommodate up to 20 projects across Maharashtra and revised the green-energy requirement to 51% [3]. This expansion is intended to attract a wider range of investors and facilitate the development of data centre infrastructure beyond established urban centres.

Performance

The strongest measurable indicator of Maharashtra’s position is its continued dominance in India’s data centre market. According to the Ministry of Electronics and Information Technology (MeitY), India’s operational data centre capacity exceeded 1,500 MW by 2025. Mumbai and Navi Mumbai accounted for approximately 790 MW of operational capacity, followed by Chennai at 305 MW, Bengaluru at 182 MW and Hyderabad at 152 MW, according to industry figures presented in the government’s Lok Sabha reply dated 18 March 2026 [4].

Industry reports also demonstrate the expansion of the market. Cushman & Wakefield’s India Data Centre H1 2025 Update, covering the first half of 2025, recorded Mumbai’s operational capacity at 594 MW, with 337 MW under construction and 852 MW in planned supply. The report also recorded 554 MW of cumulative colocation absorption in Mumbai [5]. These figures represent different indicators: operational capacity refers to existing infrastructure, absorption measures demand taken up by customers, while under-construction and planned supply represent future additions.

Similarly, Savills India’s Data Centre Market Watch: Year End 2025, covering market activity during 2025, reported 427 MW of data centre absorption across major Indian cities. Mumbai accounted for 49% of this annual absorption, followed by Chennai at 20%. The report also recorded approximately 387 MW of additional data centre capacity across major cities during the year [6]. These absorption figures should not be confused with total operational capacity or proposed project capacity.

The wider Maharashtra IT ecosystem has also expanded. According to the Economic Survey of Maharashtra 2025–26, 37 public IT parks developed by MIDC, CIDCO and Software Technology Parks of India (STPI) were functioning in the state, with investment of approximately ₹18,595 crore and employment of around 2.7 lakh people up to December 2025. The survey further reported software exports of ₹1,74,798 crore and employment of approximately 7.46 lakh in the broader IT industry up to January 2026 [7]. These figures indicate the growth of Maharashtra’s overall IT sector and should not be interpreted as outcomes attributable exclusively to data centres.

The policy framework has also been followed by large investment proposals. On 10 December 2024, the Maharashtra government issued an offer letter to Adani Enterprises Limited for a proposed Green Integrated Data Centre Park at Taloja, Navi Mumbai. The proposal involved a planned capacity of 500 MW and fixed capital investment of ₹30,000 crore, subject to policy conditions [8].

More recently, on 8 October 2026, ReNew signed a memorandum of understanding with the Maharashtra government for a proposed ₹70,000 crore integrated green data centre park in the Mumbai Metropolitan Region. The project is planned at 750 MW across locations including Panvel, Khalapur, Taloja and Bhokharpada, with operations expected to begin in 2028 [9]. This announcement indicates continued investor interest in Maharashtra’s data centre ecosystem, although the proposed investment and capacity should not be treated as realised investment or operational infrastructure.

Despite these developments, assessing the direct impact of the 2023 policy remains difficult. A comprehensive publicly accessible policy-specific dashboard providing information on approved projects, actual investment, operational capacity, employment, electricity consumption and incentives disbursed is not readily available. Consequently, market expansion and investment announcements cannot automatically be attributed to the policy alone.

Impact

The policy has strengthened Maharashtra’s position as a major data centre destination in India. The combination of fiscal incentives, infrastructure support, power reliability, submarine cable connectivity and regulatory facilitation has helped create a favourable environment for large-scale digital infrastructure investment [1].

The concentration of data centres in Mumbai and Navi Mumbai also generates wider economic opportunities. These facilities support cloud computing, financial technology, digital public infrastructure, e-commerce, telecommunications, AI and enterprise services. Their development can encourage associated investment in renewable energy, construction, fibre connectivity, cooling technologies and specialised technical services.

The Green Integrated Data Centre Park framework represents an important shift from attracting investment alone towards incorporating environmental considerations into digital infrastructure development. The original 2024 framework linked additional incentives with renewable-energy use, PUE and CUE performance and LEED building standards [2].

However, environmental sustainability remains a significant concern. Data centres require continuous electricity and cooling, while their water requirements vary according to the cooling technologies deployed. In its Rajya Sabha reply dated 30 March 2026, the Ministry of Jal Shakti stated that advanced technologies such as direct-to-chip liquid cooling, adiabatic cooling and immersion cooling are being adopted to improve water efficiency. It also referred to the groundwater extraction guidelines issued through notification S.O. 3289(E), dated 24 September 2020, and the subsequent amendment of 29 March 2023 [10].

The reduction of the green-energy requirement from 100% to 51% under the revised 2026 framework improves the practical feasibility of large projects but also reduces the original environmental ambition [3]. Therefore, the expansion of capacity needs to be accompanied by transparent monitoring of renewable-energy procurement, electricity consumption and water use.

Another important impact concerns regional development. While Mumbai and Navi Mumbai continue to dominate the sector, the 2026 expansion creates opportunities for other parts of Maharashtra, including Vidarbha and Nagpur. However, such expansion will require reliable electricity, fibre connectivity, water infrastructure and skilled manpower.

Emerging Issues

Attribution and transparency: Investment commitments and operational capacity need to be clearly distinguished. A public policy dashboard should disclose approved projects, realised investment, operational capacity, employment and incentives disbursed.
Energy intensity: Data centres require continuous and reliable electricity. MeitY has highlighted that the country’s data centre electricity demand could reach approximately 17 GW by 2031–32, according to Central Electricity Authority estimates [11].
Water consumption: Cooling requirements differ across facilities and technologies. Regular disclosure of water requirements, freshwater consumption, recycling rates and cooling methods is necessary to assess environmental impact [10].
Dilution of green requirements: The reduction of the renewable-energy requirement from 100% to 51% improves project feasibility but requires stronger monitoring of the remaining electricity mix [3].
Regional imbalance: Mumbai and Navi Mumbai continue to dominate the sector. Expansion into other regions must be supported by adequate power, connectivity, water and infrastructure.
Employment quality: Data centres are capital-intensive projects and do not necessarily generate employment in proportion to their investment. Incentives should therefore include measurable local employment and skill-development targets.
Fiscal effectiveness: Large tax exemptions and subsidies should be periodically evaluated against actual investment, employment, technological development and public revenue generated by supported projects.

Way Forward

Maharashtra has established a favourable policy environment by combining financial incentives, infrastructure development and regulatory facilitation. The next stage should focus on ensuring that approved projects become operational, generate measurable economic benefits and remain environmentally sustainable.

First, the state should establish a public Data Centre Policy Dashboard covering sanctioned investment, actual investment, operational capacity, employment, electricity consumption, renewable-energy share, water consumption and incentives disbursed. This would improve transparency and enable more accurate assessment of policy outcomes.

Second, fiscal incentives should increasingly be linked to measurable outcomes. Projects receiving substantial electricity, SGST or capital incentives should be required to meet clearly defined milestones relating to operational capacity, local employment, renewable-energy procurement and skill development. Periodic reviews would help ensure that public support generates measurable economic returns.

Third, the expansion beyond Mumbai and Navi Mumbai should be supported through targeted infrastructure planning. Emerging locations should receive adequate transmission capacity, fibre connectivity, sustainable water infrastructure and skilled manpower before large projects are approved. This would reduce pressure on established urban centres and promote balanced regional development.

Fourth, environmental performance should remain central to the Green Integrated Data Centre Park framework. The revised 51% renewable-energy requirement should be accompanied by transparent reporting of renewable-energy procurement, PUE and carbon performance, water-recycling requirements and periodic environmental audits. Greater use of treated wastewater and efficient cooling technologies should also be encouraged.

Finally, Maharashtra should use its data centre ecosystem to strengthen the wider digital economy. Greater linkages with artificial intelligence, cloud computing, cybersecurity, semiconductor manufacturing, Global Capability Centres and digital public infrastructure can help convert infrastructure investment into broader technological and employment gains.

The policy has reinforced Maharashtra’s position as India’s leading data centre market. Its long-term success, however, will depend on whether the state can combine large-scale digital infrastructure with reliable power, responsible resource management, regional development and measurable public value. The transition from a Mumbai-centric data centre hub to a wider, greener and more outcome-oriented ecosystem will be critical to Maharashtra’s ambition of becoming a leading technology and investment destination.

References

[1] Government of Maharashtra. (2023). Maharashtra Information Technology and Information Technology Enabled Services Policy 2023. Industries Department.
https://industry.maharashtra.gov.in/sites/default/files/2025-09/it-policy-booklet_1_11zon.pdf

[2] Government of Maharashtra. (2024, October 9). Regarding establishment of Green Integrated Data Centre Parks in the state. Government Resolution No. MATANDHO-2024/C.R.138/Industry-2, Industries, Energy, Labour and Mining Department.
https://industry.maharashtra.gov.in/sites/default/files/2025-09/20241009haraita-daetaa-saentara-paarakasa.pdf

[3] Gangan, S. P. (2026, June 14). State expands data centre policy’s scope, incentives. Hindustan Times.
https://www.hindustantimes.com/cities/mumbai-news/state-expands-data-centre-policy-s-scope-incentives-101781378129874.html

[4] Ministry of Electronics and Information Technology. (2026, March 18). Data centre capacity in the country has grown from 375 MW in 2020 to more than 1500 MW. Press Information Bureau, Government of India.
https://www.pib.gov.in/PressReleasePage.aspx?PRID=2241783

[5] Cushman & Wakefield. (2025). India Data Centre H1 2025 Update.
https://assets.cushmanwakefield.com/-/media/cw/apac/india/insights/indiadatacentreupdateh12025v4.pdf

[6] Savills India. (2026). Data Centre Market Watch: Year End 2025.
https://www.savills.in/research_articles/165611/227000-0

[7] Government of Maharashtra. (2026). Economic Survey of Maharashtra 2025–26. Finance Department, Government of Maharashtra.
https://finance.maharashtra.gov.in/en/publication/economic-survey-of-maharashtra-2025-26/

[8] Government of Maharashtra. (2024, December 10). Offer letter for Green Integrated Data Centre Park: Adani Enterprises Limited, Taloja, MMR, Navi Mumbai. Industries, Energy, Labour and Mining Department.
https://land.midcindia.org/PriorityLandAllotment/DownloadFile?SubAttachmentID=1726287

[9] Singh, S. P. (2026, October 8). ReNew signs MoU with Maharashtra for ₹70,000 crore green data centre park. Business Standard.
https://www.business-standard.com/industry/news/renew-signs-mou-with-maharashtra-for-70-000-crore-green-data-centre-park-126100801226_1.html

[10] Ministry of Jal Shakti. (2026, March 30). Water consumption by data centers in the country. Press Information Bureau, Government of India.
https://www.pib.gov.in/PressReleasePage.aspx?PRID=2246886

[11] Ministry of Electronics and Information Technology. (2026, August 12). Government promotes sustainable growth of data centres through energy-efficient and clean energy measures. Press Information Bureau, Government of India.
https://www.pib.gov.in/PressReleasePage.aspx?PRID=2298108

About the Contributor

Shailja Singh is a Research Intern at the Impact and Policy Research Institute (IMPRI) and a third-year B.A. (Hons.) Political Science student at Lakshmibai College, University of Delhi. Her areas of interest include public policy, governance, international relations and institutional processes.

Acknowledgement

The author sincerely acknowledges the IMPRI team for their guidance, valuable feedback, and continuous support throughout the preparation of this Policy Update.