Google’s $10 bn Vizag data centre gains tax certainty: Lokesh

The Andhra Pradesh government, in coordination with the Centre, has ensured tax certainty for Google’s upcoming $10 billion data centre in Visakhapatnam, removing all potential hurdles to facilitate the tech giant’s investment, according to state IT Minister Nara Lokesh.“We made sure that there is no retrospective taxation in this space,” Lokesh said, adding that the government sought clarity from the Centre on how data processed in these centres will be taxed. “We have defined how a ‘permanent establishment’ will apply to ensure transparency and certainty in tax treatment.”
The project, being developed by Google’s subsidiary Raiden Info Tech, involves an investment of Rs87,520 crore and is expected to create around 1.88 lakh jobs while contributing Rs10,518 crore annually to Andhra Pradesh’s Gross State Domestic Product (GSDP) during the 2028–2032 period. Lokesh described the project as India’s largest foreign direct investment (FDI) to date.He said the state’s focus has been on ensuring a smooth investment process through proactive governance and close coordination with the Centre. “In Andhra Pradesh, we have a double-engine ‘bullet train’ — offering best-in-class incentives and policy support. We have worked to remove uncertainty around taxation and regulatory approvals,” Lokesh said.The Minister also clarified that the land for the project was allocated at a mutually agreed market price and added that the government is ensuring that data originating from India remains stored within the country. “We have the right talent, ecosystem, and speed of doing business,” he said, noting that regular project updates are tracked through a coordination mechanism involving multiple departments.
Nara Lokesh emphasized that data centres will not strain the state’s resources. Unlike countries such as Ireland, the Netherlands, and Singapore which have imposed moratoriums on new data centre projects due to heavy power usage — Andhra Pradesh is leveraging its renewable energy capacity to support sustainable growth.“With our vast coastline, we have immense renewable energy potential,” Lokesh said. Tata Power Renewable Energy Ltd has already committed investments worth Rs49,000 crore to develop green power projects in the state. “Andhra Pradesh has wind, solar, and thermal energy sources. We will set up a separate power grid for data centres — Google will pay for it, and part of it will be subsidised by the state.”
Alongside Google, Andhra Pradesh has approved a $1.9 billion investment by Sify for a 550 MW data centre facility, taking the state’s total data centre commitments to 1.6 GW, with a target to scale up to 6 GW over the next five years.In addition, ArcelorMittal has announced a $16.6 billion investment to set up India’s largest shore-based integrated steel plant in the state, while Bharat Petroleum Corporation Ltd (BPCL) has proposed a $10.7 billion refinery and petrochemical complex.According to Lokesh, more large-scale investments are in the pipeline across technology, agriculture, manufacturing, and tourism sectors. “We’re driving a ‘Speed of Doing Business’ approach to eliminate procedural delays and make Andhra Pradesh the preferred investment destination,” he said.The state government has launched a series of progressive policies — including the Industrial Development Policy 4.0, Electronics Policy 4.0, Food Processing Policy 4.0, and Integrated Clean Energy Policy 4.0 to provide incentives for industries in high-growth sectors,according to information.