Prioritise Data Centre Policy In Order To Accelerate Digital Adoption

Adoption of artificial intelligence (AI) is on the rise across the world. And India is no exception. More and more enterprises are looking at improving operational efficiency and increasing their bottom line through AI adoption. This has added another chapter to India’s digitalisation journey. Already, as an emerging economy, it has pioneered in many fields through development of its own digital stack.

The availability of cheap data, supportive government policies and huge young population are seen as factors driving this digitalisation drive. As more users come to the digital fold, the data so created are rising by the day. For safe storage and security of their sensitive data, it is essential to create data centres, which explains the speed with which the country is building them up all over. A recent ICRA report said that the operational capacity of the country’s data centres will more than double to 2,000-2,100 MW by FY27 from 950 MW in FY24, involving an investment of Rs. 50,000-Rs. 55,000 crore. Currently, NTT Global Data Centers, STT Global Data Centers, CtrlS Data Centres, Sify Technologies and Nxtra Data Ltd dominate the data centre business with an astounding 85 per cent share.

In a major development, new players are entering the field at a faster rate. Yotta, Digital Connexion, Lumina CloudInfra, CapitaLand, and Digital Edge, among others, have entered the industry with massive investments. This shows the potential of India’s data centre business, which is being ensured by adoption of AI. Delving deep into future of data centre business shows that the future is bright, particularly considering that there is no going back from the current path. The fact is the digitalisation is irreversible and as India grows, more volume of data will get created, which will require safe upkeep. Secondly, data localisation drive is sweeping the world. India has also joined the league with the Reserve Bank of India already mandating storage of financial data of citizens within the country. Moreover, the country is currently debating the draft Digital Personal Data Protection Bill. Once this bill gets legislative mandate, more Indian data needs to be stored within the shores of the country.

Given that cybersecurity threats are increasing by the day, laws will get stricter on handling citizen data. All these factors are likely to drive demand for creation of data centre-specific infrastructure. However, some concerns need to be addressed while building more data centres in the country. Firstly, they are huge power guzzlers. Therefore, there should be an assured power supply to these units for their smooth functioning. With many states remaining power-deficit, there should be a proactive planning for power supply. Secondly, more power consumption implies more carbon footprint. Against this backdrop, sustainable environment practices need to be devised for the growth and sustainability of data centres. As India grows, the digitalisation drive will accelerate further. For their orderly growth, the government should come up with an effectively implementable data centre policy, the sooner the better.