From Our Correspondent
Amaravati: Andhra Pradesh has secured its largest-ever foreign direct investment (FDI) with Google set to establish Asia’s biggest data centre cluster in Visakhapatnam — a deal driven by Chief Minister N. Chandrababu Naidu’s policy push and IT Minister Nara Lokesh’s on-ground execution.
The ₹87,520-crore project by Google’s arm Raiden Infotech was cleared by the State Investment Promotion Board (SIPB) as part of ₹1.14 lakh crore worth of new investments. The project, spread across Adavivaram, Tarluvada, and Rambilli near Vizag, is expected to create over 1.8 lakh jobs and contribute ₹10,500 crore annually to the state’s economy from 2028.
Policy Breakthrough
Google’s offer to set up a data centre in Vizag had some strings attached. The existing state policy offered little in the way of exemptions or special tax treatment for data centres. Google asked for tax incentives, assurances, and structural flexibility that the national and state rules didn’t currently allow.
Naidu took a personal interest. He intervened at the highest level. In conversations with Prime Minister Narendra Modi and Union IT Minister Ashwini Vaishnaw, Naidu argued that modifying central policy to accommodate such projects would serve not just AP but India’s data infrastructure ambitions. His pitch: attract marquee global investment, create jobs, boost ancillary industries, and position Andhra Pradesh as a digital infrastructure hub.
The result: the Union government agreed. The national data centre policy was tweaked to offer tax exemption for 20 years to qualifying data centre firms, provided they met performance, timelines, and employment benchmarks. Further, Google and similar entities would be allowed input tax credit (ITC) on GST for capital assets (like cooling, HVAC, etc.). And crucially, foreign companies operating or leasing at least 100 MW capacity from Indian firms would be given “permanent establishment” status.
Lokesh’s Investor Push
As IT and Electronics Minister, Nara Lokesh played a pivotal role in closing the deal and building investor confidence. He has positioned Visakhapatnam as the state’s “AI and Data Valley,” and has held multiple investor meetings in Mumbai, Singapore, and Bengaluru to pitch Andhra’s new industrial ecosystem.
Lokesh’s outreach has already attracted TCS, Cognizant, and Accenture to expand in Vizag. He also partnered with Google on AI skill development initiatives and rolled out the state’s LIFT Policy offering land and fiscal incentives to data and electronics firms.
Execution Challenges
While the Google deal signals a massive confidence boost, implementation hurdles remain. Legal disputes over land in Tarluvada and acquisition delays have slowed groundwork. The government has invoked fast-track measures to resolve pending cases and enable clearances through the Guntur and Vizag collectors.Several critics, including the opposition YSRCP, have raised concerns that the data centre will require enormous amounts of water and energy, potentially affecting the needs of citizens.
Reclaiming the Reform Tag
The Naidu–Lokesh combine has effectively re-branded Andhra Pradesh as an FDI-friendly innovation hub, reviving the state’s image as a reform-driven economy. If executed as planned, the project could redefine Andhra’s economic trajectory — transforming it from an aspirant to a national leader in digital infrastructure and data technologies.