Introduction: UP Data Centre Subsidy

The UP Data Centre subsidy is now one of the strongest cost benefits for digital infrastructure in India. The Government of Uttar Pradesh notified the UP Data Centre Policy 2026 on 9 July 2026. As a result, investors now have a fresh set of incentives to plan around. However, the rules are detailed, and a small mistake can cost you crores.

We explain the financial incentives, eligibility, and application process in simple words. Also, we show how a subsidy consultant can protect your claim from day one.

What Is the UP Data Centre Policy 2026?

The UP Data Centre Policy 2026 is the state’s new framework for data centre investment. The Department of IT and Electronics runs it. The policy stays in force for five years from notification, or until the state amends or repeals it.

Moreover, it replaces the UP Data Centre Policy 2021 (First Amendment 2022). However, units that already hold a Letter of Comfort (LoC) under the old policy keep their admissible benefits. If they have missed the start-up targets, they may seek more time. That extension can never exceed three years.

The state aims to add 2 GW of capacity and attract over ₹2 lakh crore of investment. Besides, it wants at least 50% renewable energy in new data centres by 2030.

Who Can Apply? UP Data Centre Policy Eligibility

First, the applicant must be a company registered in India under the Companies Act, 2013. Then, the project must fit one of three categories. Each category decides which incentives you can claim.

In addition, an investor who qualifies in more than one category can claim benefits under one category only. So, the choice of category matters a great deal.

What Counts as Eligible Fixed Capital Investment?

Most subsidies depend on Eligible Fixed Capital Investment (EFCI). Therefore, you must know what the policy counts. It covers IT equipment, power and cooling systems, safety systems, and monitoring tools. For example, servers, UPS, chillers, fire suppression, and DCIM software all qualify.

On the other hand, the policy excludes several items:

• Land, building value, and land development cost.
• Second-hand, refurbished, relocated, or leased equipment.
• Cash purchases outside traceable banking channels.
• GST, customs duty, and other taxes.
• Pre-operating costs, consultancy fees, and working capital.

Hence, wrong billing or cash payment can reduce your claim. Finraja Consultancy checks these points before you buy anything.

UP Data Centre Subsidy: Financial Incentives for Data Centre Parks

Data Centre Parks get the largest package. Let us look at each incentive in turn.

UP Data Centre Interest Subsidy

A Park receives 60% of the annual interest paid on a term loan for the first seven years. However, the annual cap is ₹10 crore. Also, the overall ceiling is ₹50 crore per Park. The subsidy covers only loans taken for EFCI. The lender must be a scheduled bank or an RBI-regulated institution.

For example, a yearly interest of ₹20 crore gives ₹12 crore at 60%. Still, you would receive ₹10 crore because of the annual cap.

UP Data Centre Land Subsidy

The land subsidy depends on the region of the project. It applies to the prevailing sector rate on land bought or leased from State Agencies.

• Madhyanchal and Paschimanchal: 25% land subsidy.
• Bundelkhand and Purvanchal: 50% land subsidy.

Notably, the state pays this amount to the State Agency after your project starts commercial operation. The agency then adjusts it in your payment plan.

Stamp Duty Exemption

A Park gets a 100% stamp duty exemption on land or built-up area bought or leased from a government body. Moreover, a 50% exemption applies on the second transaction, from the park to a Unit. However, the state gives this exemption against a bank guarantee, which it releases once commercial operation starts.

Dual Grid Power Subsidy

The state reimburses the cost of one power grid, the cheaper of the two. The Park bears the other grid. Yet this benefit has a limit. It ends when the first eight Parks are set up, or when 2 GW of new capacity is reached, whichever comes first.

Wheeling and Transmission Charges

Power is the biggest running expense in this sector. Therefore, this incentive is valuable. The policy offers three levels for 25 years from commissioning:

• 50% exemption on intrastate purchase of power.
• 75% exemption when power comes from renewable sources within the state.
• 100% exemption on intrastate transmission for interstate purchase.

Also, the same eight-Park and 2 GW limit applies here. So, early movers have a clear advantage.

Tier III and Tier IV Certification Booster

A Park gets a one-time refund of 25% of certification charges for Tier III. For Tier IV, the refund is 50%.

UP Data Centre AI Compute Incentive

This is a new feature in the 2026 policy. A Park that installs at least 700 FP64 (double precision) AI compute units get extra support. The interest subsidy ceiling rises by ₹10 crore overall and ₹2 crore per year. However, you must prove the claim with invoices, payment records, and OEM installation certificates. In addition, an auditor must certify that the units run within a single building or floor.

Green and Sustainable Operations Booster

Parks with a top-two-level green certification can add more to the interest subsidy ceiling. For instance, a PUE of 1.35 or less adds ₹4 crore to the overall ceiling. Likewise, renewable energy above 70% adds another ₹4 crore. In total, the green booster can add up to ₹10 crore overall and ₹2 crore per year.

UP Data Centre Capital Subsidy for Data Centre Units

Smaller projects take a different route. A Data Centre Unit receives a 7% capital subsidy on EFCI, excluding land and building cost. However, the total ceiling is ₹20 crore. The state pays it within 10 years, with a yearly cap of ₹2 crore.

For example, an EFCI of ₹200 crore gives ₹14 crore. At ₹2 crore a year, you would receive it over seven years.

Units also enjoy these benefits:

• 100% electricity duty exemption for 10 years after commercial operation.
• The same land subsidy, stamp duty, wheeling, and Tier booster as Parks.
• An AI compute booster of ₹5 crore (total) and ₹0.5 crore (yearly) for 350 FP64 units.
• A green booster of up to ₹5 crore overall and ₹0.5 crore per year.

Extra Benefits for Edge Data Centres

Edge Data Centres get all Unit incentives, except the green booster. Besides, they get a 25% internet cost subsidy. The limit is ₹2.5 lakh per year per site, for the first three years of operation.

Non-Financial Incentives You Should Not Miss

Besides cash support, the policy gives practical help. For example, data centres are an essential service under ESMA. Likewise, the state ensures 24×7 water supply, and base FAR of 3.0 is free. In addition, open access and banking of energy are available. These benefits start after the Acknowledgement Letter. In contrast, financial benefits start only after the LoC.

Why Hire a UP Data Centre Subsidy Consultant?

This policy has many caps, limits, and proof rules. As a result, a mistake can delay your money by months. A trusted-UP Data Centre subsidy consultant helps you in several ways:

• Picks the best category and incentive mix.
• Prepares a strong IPR and detailed project report.
• Aligns your bank loan and billing with EFCI rules.
• Tracks every deadline until final disbursement.

Finraja Consultancy Pvt Ltd works as a subsidy consultancy. Our team guides data centre investors from IPR filing to the final claim. Also, as a UP Data Centre incentive application consultant, we manage the Nivesh Mitra work for you. So, you can focus on building your project.

Frequently Asked Questions

What is the maximum interest subsidy for a Data Centre Park? The base ceiling is ₹50 crore, with ₹10 crore per year. Boosters can add up to ₹20 crore overall.

How much capital subsidy does a Data Centre Unit get? It gets 7% of EFCI, up to ₹20 crore. Boosters can raise the ceiling by up to ₹10 crore.

Conclusion

The UP Data Centre subsidy offers real savings on capital, interest, land, and power. However, the benefits depend on early planning and clean documents. Several incentives also close once eight Parks, or 2 GW are reached. So, timing matters.

Call us now: +91 9373114747 or visit finraja.com/contact for quick assistance.