Visakhapatnam: The Andhra Pradesh government, in coordination with the Central government, has ensured that all taxation hurdles are cleared for Google to build a $10-billion hyperscale data centre in Visakhapatnam. The announcement was made by Nara Lokesh, Minister for Information Technology, Electronics and Communications, in an interview with Moneycontrol.

“This is India’s largest FDI investment ever,” Nara Lokesh said, highlighting the scale of the project, which is being developed through Google’s subsidiary, Raiden Info Tech. The data centre is expected to create 1.88 lakh jobs and add approximately Rs 10,518 crore annually to Andhra Pradesh’s GSDP during the 2028–2032 period.

Tax clarity and regulatory support

Nara Lokesh explained that the state and Centre have clarified the taxation framework for data centres, ensuring there will be no retrospective taxation. He added that the definition of ‘permanent establishment’ (PE) has been clarified under income tax laws, providing certainty for foreign enterprises. The treatment of India-origin data has also been defined, ensuring that data processed in the country remains within India.

“The Andhra government is working to provide best-in-class incentives and support, including policy alignment with the Centre,” Lokesh said. He personally accompanied Google executives to the Visakhapatnam site when discussions began in September 2024.

Land and ecosystem advantages

The land for the data centre was provided at a market price mutually agreed between the state and Google. Lokesh highlighted Andhra Pradesh’s talent pool, business ecosystem, and efficient governance as key factors attracting such mega investments. To streamline project execution, the state government creates WhatsApp groups for every investment project, providing weekly updates on progress.

Sustainability and energy considerations

Addressing environmental concerns, Lokesh noted that data centres in Andhra Pradesh are not a drain on power or water resources. The state has a vast coastline and is investing heavily in renewable energy. For instance, Tata Power Renewable Energy Ltd is developing renewable projects worth Rs 49,000 crore ($5.6 billion). Google’s data centre will have a dedicated power grid, partially subsidised by the state, ensuring sustainable operations.

Pipeline of mega investments

The Andhra government is also facilitating other large-scale projects, including:

  • Sify: $1.9 billion for a 550 MW data centre facility
  • ArcelorMittal: $16.6 billion shore-based integrated steel plant
  • BPCL: $10.7 billion oil refinery and petrochemical complex

Overall, the state has secured 1.6 GW in data centre commitments and aims to scale up to 6 GW over the next five years. Policies like Industrial Development Policy 4.0, Electronics Policy 4.0, Food Processing Policy 4.0, and Integrated Clean Energy Policy 4.0 are designed to provide incentives and boost investment in high-growth sectors.

Conclusion

Andhra Pradesh’s coordinated approach with the Central government on taxation, policy alignment, and procedural efficiency has positioned the state as a preferred destination for mega FDI projects, particularly in technology, manufacturing, energy, and infrastructure sectors. Google’s investment is expected to transform Visakhapatnam into a major data hub and significantly boost the state’s economy.