GO On Guidelines, A Shot In Arm For Data Center Project In Vizag

Visakhapatnam: The plans to develop an exclusive data city in 500 acres in Visakhapatnam is expected to get traction with the TDP-led NDA Government issuing the operating guidelines to implement Andhra Pradesh Data Centre Policy (4.9) unveiled last year.

The policy envisages to add a few hundred megawatts, up to one gigawatt of additional data center capacity in Andhra Pradesh during the policy period, with a focus on attracting investments from advanced data centers equipped with artificial intelligence (AI) capabilities, and establishing the state as a preferred destination for large-scale data embassies and data center parks. After signing an MoU, the government is holding negotiations with Google for establishment of a data center in the proposed data city here.

The State Cabinet last month allotted 60 acres to URSA Clusters to set up its data center project with an investment of Rs5,278 crore in Visakhapatnam. Foundation stone was laid in 2023 for Vizag Tech Park, a subsidiary of Adani Group for an investment of Rs21,844 crore on a 300 megawatt data center and other facilities in the city. The project proponent is yet to kick-start work.

Data centres will propel growth of the service sector, tourism, technology and AI innovation, State IT, Electronics and Education Minister Nara Lokesh recently said. After allotting a large parcel of land to TCS at 99 paise for setting up a permanent campusm the government is in talks with Infosys, which has a small presence in the city, to offer it a slew of incentives to develop a huge facility. At present, Visakhapatnam, dubbed as the IT capital of Andhra Pradesh, has a turnover of around Rs.2500 crore mostly from BPM units like Conduent and Concentrix. In GO Ms. No. 12 dated May 2, 2025 issued by the IT, Electronics & Communications (Promotions) Department, the government clarified on promised incentives in the policy. It also committed to give tailor-made incentives on a case-to-case basis subject to fulfilment of eligibility criterion.

In the GO, IT, E&C Secretary Bhaskar Katamneni stated that eligible companies desirous of seeking financial assistance/concessions, beyond those already provided in the policy, must present detailed representations along with project reports to IT, E&C Department, clearly spelling out special incentives being sought with due justification before or during initial stages of implementation.

On receipt of such proposals, the IT,E&C department will examine the same with due diligence and forward it to the government through an empowered Consultative Committee for IT and Electronics. Industry constituted by the State Government.

After clearance from the committee, the proposal has to be validated by the State Investment Promotion Committee (SIPC) and State Investment Promotion Board (SIPB) for taking a suitable decision on offering tailor-made incentives. The process for approving tailor-made incentives also necessitates the submission of Detailed Project Report (DPR) to AP Economic Development Board (APEDB), which has been revamped after the new government assumed office in June, 2024. In turn, APEDB will scrutinise the DPR, assess benefits to the State and put up the case to the empowered committee for review and take it forward to SIPC and subsequently to SIPB.

The list of incentives, once approved, will be notified through separate GOs for each investor to ensure transparency. SIPC and SIPB-approved projects will be placed before the State Cabinet as per the incentives offered to mega projects cutting across all industries and sectors. This will involve projects which seek more than 50 acres. The GO refers to repetitive requests received from mega and other big ticket projects which may require standardization/policy level interventions.