Andhra Pradesh offers Rs 19K cr incentives to Reliance for AI Data Centre in Vizianagaram

Hyderabad: Andhra Pradesh on Wednesday approved allotment of nearly 855 acres of land and also an approximate Rs 19,100 cr fiscal incentives spread over 10 to 20 years for the establishment of a giga-scale AI Data Center (AIDC) and Cable Landing Station (CLS) by Reliance Industries Ltd (RIL) in Vizianagaram district.

The project, carrying a proposed cumulative investment of Rs 1,08,010 crore, marks one of the largest AI and data center investments announced in India so far and significantly strengthens Andhra Pradesh’s ambition to emerge as the country’s leading AI and digital infrastructure hub.

Under G.O. Ms No. 30 issued by the IT, Electronics & Communications Department on Wednesday the state approved the allotment of 854.97 acres across Polipalli, Bhogapuram West and Bhogapuram East villages in Vizianagaram district for the project. The proposal also includes a dedicated Cable Landing Station, a critical component that would directly connect Andhra Pradesh to global internet and data traffic networks.

The approval comes as Andhra Pradesh aggressively positions Vizag and the north coastal belt as India’s next-generation AI and hyperscale data center corridor, leveraging abundant renewable energy, port connectivity, subsea cable access, and large land parcels.

The state government has extended a customized package of fiscal and non-fiscal incentives to Reliance under the Andhra Pradesh Data Center Policy 4.0 (2024–29), which was designed to attract advanced AI-enabled data center projects.

The government has also directed APTRANSCO to facilitate grid infrastructure development for the campus, while APIC has been asked to explore joint ownership models for a desalination plant to support the project’s long-term water requirements.

The Reliance project adds fresh momentum to Andhra Pradesh’s fast-expanding AI and data center ecosystem. The state has already positioned itself as a major destination for AI-native data centers and digital infrastructure investments, with plans for several gigawatts of data center capacity across Visakhapatnam and surrounding regions. Google had recently broken ground for the construction of a hyperscale data centre with an investment of 15 billion USD in Visakhapatnam.

The inclusion of a Cable Landing Station at the RIL campus gives the project strategic significance beyond a conventional data center investment, potentially enabling Andhra Pradesh to emerge as a major digital gateway for international internet traffic and cloud infrastructure.

The move also aligns with the state government’s broader strategy of building a full-stack digital ecosystem combining renewable energy, AI infrastructure, advanced manufacturing, subsea connectivity, and electronics supply chains.

Reliance’s proposed investment is expected to create significant direct and indirect employment while catalyzing downstream investments in telecom infrastructure, cloud services, electronics manufacturing, and AI compute ecosystems across the region.\

The Andhra Pradesh Economic Development Board (APEDB) after evaluating the proposal given by RIL, recommended it to the Consultative Committee on Information Technology and Electronics Industry (CCITEI). The proposal was placed before the CCITEI in its 18th meeting held on April 23. The CCITEI forwarded the proposal to the State Investment Promotion Committee (SIPC). The SIPC, in its 25th meeting held on April 25, approved the same to be placed before SIPB. Accordingly, the proposal was placed before the State Investment Promotion Board (SIPB) in its 17th meeting held on May 6, and the SIPB, based on the recommendations of the SIPC, decided the fiscal and non fiscal incentives package.

Non - Fiscal Incentives

1. Grid Infrastructure At-Source Waiver: APTRANSCO shall facilitate the development of the Electrical Infrastructure, subject to a thorough feasibility check, detailed system studies, and field assessment. The provision is extended for the load end (Data Centre site). The project proponent shall bear the cost of the infrastructure.

2. Single Window Clearance: shall be facilitated as per EoDB rules.

3. Empowered Nodal officer: The Steering Committee shall oversee the implementation of the project, which is in line with the other DC projects.

4. Water Supply Guarantee & Joint ownership of Desalination Plant: The government shall facilitate the guaranteed water provision to the proposed sites for a period of 20 years through the Water Resource department/ M&UD/ APIIC. The project proponent shall bear the cost. APIIC is directed to study in detail on the joint ownership of the desalination plant and to present a feasible proposal to the Government.

Fiscal Incentives:

1. Land Allotment: Allotment of land at a 25% discount on the value to the company.

The details are as follows: a. The total extent of land recommended for the data center project is 853.97 acres.

b. Revenue Dept is directed to alienate the said lands to APIIC for further allotment to the company. The Company should pay 75% ofthe land cost to APIIC as and when APIIC initiates the land acquisition process.

c. One acre of land is recommended for the landing cable station. APIIC and District Administration to identify a suitable land parcel for further allotment to the company.

Stamp Duty & Registration Exemption: 100% stamp duty and registration charges are exempted.

3. Capital Subsidy: Capital Subsidy at 6% of investment in Machinery & Equipment, disbursed over 10 equal instalments with a cap of INR 4,500.00 Cr.

4. SGST Reimbursement: a. SGST Reimbursement on Construction: 100% reimbursement extended on the Net SGST accrued to the State. The total incentive component is limited to INR 2,527.38 Cr. This incentive is available for a period of 10 years or until the project reaches its maximum capacity, whichever is earlier.

b. SGST Reimbursement on Leasing Cost for a period of 10 years: 100% reimbursement extended on the Net SGST accrued to the State. The total incentive component is limited to INR 1,800 Cr.

5. Water Tariff Subsidy: The water tariff shall be subsidised by 15% for a period of 10 years. The total incentive component is limited to INR 552.41 Cr.

6. OPGW Fibre Access Discount: OPGW fibre access shall be offered with a discount of 30% on the cost for a period of 20 years. O&M charges shall be escalated to 5% every 3 years. The total incentive component is limited to INR 1,220.71 Cr.

7. ROW Fee Waiver: RoW cost related to the state government entities shall be waived for 20 years. The total incentive component is limited to INR 200 Cr.

8. Power Tariff Subsidy: The power shall be provided with a discount of INR 1 per unit for a period of 15 years, with a cap of INR 3,114.18 Cr.

9. Cross-Subsidy Surcharge Exemption for 20 Years: Cross-subsidy surcharge shall not be levied for the Captive Solar Park as per the provisions of the Energy Dept.

10. Transmission / Wheeling Charges Exemption: 100% transmission charges imposed by GoAP (Energy Dept.) for a period of 20 years shall be exempted, with a cap of INR 5,000 Cr.

11. Electricity duty Exemption: 100% exemption on electricity duty for 15 years shall be extended with a cap of INR 186.85 Cr.