Data centres to fuel India's digital economy
Once dominated by foreign players, several Indian business groups including Adani and Hirandani have entered this space to leverage on demand for data storage and usage in India
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In line with the Central Government's policy Data Centres have emerged as the new sunrising industry. Once dominated by foreign players, several Indian business groups including Adani and Hirandani have entered into this space to leverage on the demand for data storage and usage in the country.
Data is new oil. And Data Centres are the nerve centres of the Digital Economy. And competition has intensified to get as much share as possible. While outsourcing by American technology giants like Google, Amazon Web Services, Microsoft, Uber, Dropbox and IBM is fueling demand for Data Centres, incremental demand from domestic market has created additional opportunities.
According to a report by ICRA an additional 3,900 to 4,100 MW of data centre capacity would be created in India with an investment of Rs 1.05 lakh crore to Rs 1.20 lakh crore. The opportunities are so much that this segment has potential to grow 5 times in the next five years, as per the rating agency.
Till recently this segment was dominated by NTT, CtrIS,STT India and Nxtra who are also seen expanding capacity to stay relevant. It is believed that Apple is expected to set up its large Data Centre and is scouting for the best offer. And the new players include Amazon, Adani, EdgeConnex, Capital Land and Hiranandani etc.
The Central Government's decision to accord industry status to Data Centres has made it easy for players to avail bank loans for a long period at affordable rates. And to encourage players to invest more the Information Technology Ministry is reportedly planning to offer incentives worth Rs 15,000 crore under the National Policy Framework for Data Centres.
Like the players, competition has intensified among states to woo investment in this sector. The major contenders are Karnataka, Telangana, Maharashtra and UP. Real estate consulting firm CBRE believes that Karnataka is way ahead than competitors and heading to be the "Data Centre destination of choice".
Thus Bengaluru after dominating as the IT capital and Startup capital of the country, would soon be the Data Centre capital of india drawing more investment. With the Data Centre policy in force, Karnataka is anticipated to lead as one of the top digital economies in the country, CBRE said in a report.
It said the Data Centres in Karnataka would expand exponentially due to the proactive policy push and owing to the enabling existing digital infrastructure in the state. Reportedly the growing potential of Big Data, Industry 4.0, 5G, and cloud computing would drive Data Centre demand in the state together with the expanding Indian OTT streaming industry, which would grow at a CAGR of 22-25 per cent, and the media and entertainment industry at a CAGR of 10-12 per cent by 2030.
As per the report, several factors, including technology hub, strategic location, power surplus, skilled talent, industrial growth, favorable policies, and low environmental risk, endorse Karnataka as a premium Data Centre destination.
Other government sops applicable across Karnataka, including power tariff concession, land subsidy, incentive on investments, and exemption on stamp duty, are likely to attract Data Centres in the state, the report said. Several initiatives by the central government would lead to data localisation. Bedsides the National E-commerce Policy 2019 and Personal Data Protection Bill 2018 which restrict cross-border data flow act as a catalyst for the growth of Data Centres in the country.
(Kalinga Nath is a Mumbai-based senior journalist)
