In a bold move to secure its position at the forefront of India's technological future, the Gujarat government has unveiled a comprehensive strategy centered on artificial intelligence (AI) and the digital economy. The plan's twin pillars are the creation of a dedicated IT–AI cluster adjacent to GIFT City in Gandhinagar and the establishment of the Indian AI Research Organisation (IAIRO), which is set to become operational on January 1, 2026.
A New Tech Hub: Gujarat IT–AI City Takes Shape
The state has decided to develop a specialized cluster for information technology (IT), IT-enabled services (ITES), and artificial intelligence right next to the Gujarat International Finance Tec (GIFT) City. While locations like Dholera SIR and Surat Dream City were considered, GIFT City was chosen for its existing world-class infrastructure and global positioning. This initiative marks a fresh approach after the earlier Infocity project did not meet expectations, with a new focus on scale, global partnerships, and robust policy support.
P Bharathi, Secretary of the Department of Science and Technology, explained the government's multidimensional strategy. She confirmed that the new cluster will be a major, dedicated zone akin to GIFT City itself. The government plans to directly engage with global technology giants, inviting them to set up operations with tailor-made incentive packages. A customised policy framework for this Gujarat IT–AI City is expected to be announced in the upcoming state budget in March.
Anchor Investors and Statewide Digital Infrastructure
As part of its implementation roadmap, Gujarat aims to attract one or two of the world's top 10 technology conglomerates—such as Microsoft, Amazon, Google, IBM, Meta, Oracle, or SAP—as anchor investors for the cluster. These companies will be offered high-end incentives covering land, infrastructure, taxation, and regulatory compliance.
The broader digital infrastructure plan is extensive and includes:
- Developing the dedicated Gujarat IT City near GIFT City.
- Establishing seven integrated IT parks across tier-2 and tier-3 cities to spread growth.
- Building a cable landing station and a large-scale green data centre to support high-speed connectivity and data-intensive AI operations.
To promote investment, the state will launch a 'Invest in Digital Gujarat' global campaign and set up a single-window facilitation cell. Policy measures will include amendments to existing IT/ITES policies and the launch of a new Science, Technology and Innovation (STI) Policy.
Indian AI Research Organisation (IAIRO): A National PPP First
In a significant parallel development, Chief Minister Bhupendra Patel has granted in-principle approval for the establishment of the Indian AI Research Organisation (IAIRO) at GIFT City. This makes Gujarat the first state in India to set up such an institution under a public-private partnership (PPP) model. IAIRO will be formed through a tripartite agreement involving the Gujarat government, the Government of India, and the Indian Pharmaceutical Alliance (IPA).
With an estimated budget of Rs 300 crore for its first five years, the funding will be shared equally by the three partners. The IPA, representing 23 leading pharma firms including Cipla, Torrent Pharma, and Sun Pharma, will act as the anchor private partner, contributing ₹25 crore in the 2025–26 financial year.
IAIRO is designed to be a multidisciplinary national hub for AI research, product development, and collaboration. Its mandate includes intellectual property creation, capacity building, and policy research, aligning with both the national India AI Mission and Gujarat's own AI Action Plan. An AI Task Force will also be formed to apply AI in sectors like healthcare, education, and agriculture.
Strategic Vision and Easing Norms at GIFT City
By situating both the IT–AI cluster and IAIRO within the GIFT City ecosystem, Gujarat aims to leverage its regulatory ease, international visibility, and proximity to fintech and startup networks. Officials believe these initiatives will build a strong AI talent pipeline, strengthen India's sovereign AI capabilities, and create large-scale employment.
In a related move to enhance the ecosystem's appeal, the Gujarat government has also eased liquor norms at GIFT City. New rules simplify access for non-resident visitors and employees, allowing external persons to consume alcohol by simply presenting a valid photo ID from another state or country, removing the earlier requirement for a liquor access permit.
Together, these sweeping measures underscore Gujarat's ambition to lead India's digital transformation and establish itself as a global nexus for emerging technologies like artificial intelligence.
