Modi's Hindu nationalist Bharatiya Janata Party (BJP) has ruled the western state for more than two decades, and a win there would further cement his prospects of securing a second term at general elections in 2019.
Nearly 43 million voters in Gujarat will cast ballots to elect 182 lawmakers, with the results announced on December 18.
"Assembly elections in Gujarat will be held in two phases on December 9 and 14," A K Joti, India's chief election commissioner, told reporters in New Delhi.
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The BJP has dominated Gujarat since 1998, winning all four state polls, including three under Modi.
December vote could prove trickier, with speculation Gujarat's powerful trading communities could vent their disapproval over Modi's economic reforms at the ballot box.
The main opposition Congress Party is seizing on anger over Modi's controversial decision to scrap India's highest-value banknotes and introduce a goods and services tax, two measures which disrupted businesses in the wealthy state.
Woman detained for throwing bangles at Indian PM Modi's face
Gujarat also witnessed some of the worst religious riots in a generation in 2002 and recent protests by low-caste Indians over their mistreatment by Hindu nationalists.
Modi headed Gujarat until taking office in New Delhi in 2014 after his party swept the national elections.
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