Andhra Pradesh government has officially cleared a massive, customized incentive package worth ₹19,100 crore for Reliance Industries Limited (RIL).
The incentives are aimed at securing a staggering ₹1,08,010 crore ($13 billion) cumulative investment from Reliance to build a giga-scale Artificial Intelligence Data Centre (AIDC) and a strategic Cable Landing Station (CLS) in the Vizianagaram district.
Issued under the state’s Data Centre Policy 4.0 (2024–29), this marks one of the largest digital infrastructure bets in Indian history, aimed at turning the Visakhapatnam and north coastal belt into a high-speed international digital gateway.
1. Land Allotment and Strategic Location
The state has cleared a massive land package to host the heavy-duty compute infrastructure, positioning it near developing coastal infrastructure:
- The Acreage: A total of 854.97 acres has been approved for allotment across the Polipalli, Bhogapuram West, and Bhogapuram East villages in Vizianagaram.
- The Land Discount: The land is being handed over via the Andhra Pradesh Industrial Infrastructure Corporation (APIIC) at a 25% discount on market value. Reliance will pay the remaining 75% as the acquisition process rolls out.
- The Cable Moat: An additional isolated acre is explicitly earmarked for the Cable Landing Station, which will directly loop Andhra Pradesh’s local servers into undersea global internet traffic networks.
2. Slicing Open the ₹19,100 Crore Subsidy Ledger
To offset the massive capital expenditure required to establish cutting-edge AI clusters, the state government has structured long-term fiscal exemptions and subsidies spanning the next 10 to 20 years:
| Incentive Category | Financial Subsidy / Exemption Terms | Hard Ceiling Cap |
| Power Infrastructure Exemption | 100% exemption on state transmission and wheeling charges for 20 years. | ₹5,000 Crore |
| Machinery Capital Subsidy | 6% capital subsidy on core computing machinery & equipment, paid in 10 installments. | ₹4,500 Crore |
| Power Tariff Subsidy | Flat discount of ₹1 per unit on electricity consumption for 15 years. | ₹3,114.18 Crore |
| Construction SGST | 100% reimbursement of Net SGST accrued during construction (valid for 10 years). | ₹2,527.38 Crore |
| Leasing Cost SGST | 100% reimbursement of Net SGST accrued on server/infrastructure leasing for 10 years. | ₹1,800 Crore |
| Fiber Access Discount | 30% discount on Optical Ground Wire (OPGW) fiber access charges for 20 years. | ₹1,220.71 Crore |
| Water Tariff Subsidy | 15% discount on industrial water tariffs for a period of 10 years. | ₹552.41 Crore |
| Right of Way (RoW) & Duty | Complete waiver of state RoW fees (20 yrs) + 100% electricity duty exemption (15 yrs). | ₹386.85 Crore |
3. Non-Fiscal Infrastructure and Utilities
Because hyperscale AI data centers draw massive amounts of power and cooling resources, the state has built unique utility guarantees into the bilateral agreement:
- The Captive Solar Moat: To keep the facility green, the Energy Department has granted a 20-year cross-subsidy surcharge exemption for Reliance’s dedicated captive solar parks, allowing them to wheel clean power directly to the data center without incurring standard grid penalties.
- Water Supply & Desalination: The state has legally guaranteed an uninterrupted water supply line to the site for 20 years. Furthermore, APIIC has been directed to draw up plans to co-develop and co-own a dedicated desalination plant alongside Reliance to meet the center’s massive cooling workflows without draining local water tables.
- Single-Window Governance: To bypass bureaucratic red tape, the project has been granted top-priority single-window clearance, overseen by an empowered state steering committee to monitor phase-wise milestone deployment.