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The need for data centres shot up exponentially in proportion to the rise in data consumption and cloud adoption. According to a JLL study, the Indian data centre sector would require a total investment of USD 3.7 billion within the next three years to meet the six million square feet of development. Despite the heavy capital involved, Indian corporations are bullish on data centres.
Last week, the Adani group committed INR 8,000 crore to build a state-of-the-art data centre at Rajarhat in West Bengal. To be completed over three years, the facility will be built on an allotted land mass of 51.75-acres. The plot area exceeds the data centre facility under construction by Reliance as a part of the Bengal Silicon Valley project in New Town in Kolkata.
Growth in Indian data center market size over the years, Source: Menafn
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Big and small investments
In 2019, a lot of Indian firms turned into data centre businesses. In July of the same year, Adani group announced an investment of up to INR 70,000 crore to build solar-powered data parks in Andhra Pradesh. As cloud adoption picked up pace in India, global tech giants started partnering with Indian conglomerates to cash in on the opportunity.
In 2019, Oracle announced Gen 2 cloud regions in Mumbai and Hyderabad. Reliance Industries tied up with Microsoft to provide cloud services to small and medium enterprises in the country. Hiranandani Group launched Yotta Infrastructure to build data centres in Mumbai and Chennai. The real estate company’s plan was to invest INR 14,000 crore over a period of five to seven years. In the end of 2021, the group said it would double its investment in Yotta.
The Gautam Adani-led group has set up a 50-50 joint venture with US-based EdgeConneX with data centres planned in Chennai, Mumbai, Noida, Vizag and Hyderabad. The group’s 409 acre facility near Vizag has been approved.
Last November, the company announced an investment of USD 70 billion by 2030 in renewable energy, and plans to power its data centres using green energy. The Rajarhat facility will also reportedly be powered by renewable sources.
Source: India Briefing
In June, rating agency CRISIL said India’s data centre capacity is projected to double to reach 1,700–1,800 MW by 2025. The country’s current capacity stands at approximately 870 MW. In a statement, director of CRISIL, Nitesh Jain said India is expected to add between 890 to 900 MW in capacity between the fiscal year 2023 and 2025.
The Indian government is also doubling down on digital initiatives to create conducive conditions for data centres. The big push towards data localisation would ensure 75 percent of the data remains within the country.
Sensing the opportunities in the sector, the Ministry of Electronics and Information Technology or MEITY drafted a data centre policy in 2020 giving data centres an ‘infrastructure status’ on par with roads, railways and power. The new policy aims to ease the clearance process for data centres. Currently, as many as 40 clearances are needed for setting up a data centre in the country.
MEITY special secretary and financial advisor Jyoti Arora said cloud data centres would be declared as special economic zones or SEZs. The government would give land, water and electricity to facilitate ease of doing business.
States like Maharashtra, Telangana, Karnataka and Uttar Pradesh also offer exemptions on stamp and electricity duty, power subsidies and concessions on land prices for data centres.
“India has witnessed a massive adoption of digital transactions, IoT and smart devices since the pandemic. The nation’s youth being tech-savvy, the usage of digital devices is only expected to surge, creating a large volume of data, which will drive the need for data centres. Add to that, the Indian government has proposed to classify the data centre sector in the category of critical infrastructure such as railways, power and roads to protect its consumers data. It is also providing incentives for the development of data centers that is attracting many businesses to capitalise on the opportunity,” said Keshav Kumar, general manager of Presales at Rahi Systems.