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Data centers have been given infrastructure status in the budget 2022. The recent development will have a significant impact on the data center industry in India. It will attract new investors from home and abroad. Data is the most valuable asset of any organization. Data management plays a significant role in the success of every organization. This is why most of the organizations are moving their resources to data centers for better data management. Data centers have now become an essential part of every organization’s business parameters. The country is rapidly moving towards the age of digitalization. The massive amounts of data in circulation has resulted in the demand for data centers in India.
Most of the data centers are currently located in the IT hubs like Mumbai, Chennai and Bengaluru. In the budget of 2022, Nirmala Sithraman announced that infrastructure status will be given to data centers and energy storage systems. Infrastructure status will help data centers to raise funds from both national and international financial institutions.
Nirmala Sitharaman said “data centers and energy storage systems will be added to the list of infrastructure. This will assist in availing credit for digital infrastructure. She further added a committee of experts will be set to devise new strategies to attract more investments. Several measures will be taken to ramp up private capital in the data center industry”.
Future Investments in Data Center Industry
Datacenter operators were expecting several announcements to be made related to infrastructure status, reduction in goods and services tax (GST) in the Budget 2022. India’s colocation data center industry is supposed to double capacity by 2023. Mumbai and Chennai are going to be the prominent data center hubs due to the availability of underlying cables and adequate power supply.
According to a report released by Anarock-Mace in 2022, India will have 28 hyperscale data centers in the next three years. The demand for Hyperscale data centers has increased in the last few years since most organizations are moving their infrastructure to the cloud. According to the International Data Corporation, a data center that exceeds over 5000 servers and 10,000 square feet is referred to as a Hyperscale. The report states that the hyperscale data centers will spread across 16 million square feet with at least 1400 Megawatt of power capacity. According to the report, Mumbai and Chennai will fulfill 60% of the requirement and the remaining will be filled by Hyderabad and NCR. The BJP government has also given approval to Yotta infrastructure to build a Datacenter park in Uttar Pradesh. It will be the first data center park in the state of Uttar Pradesh.
Which Companies are Investing in Data Centers in India
Google has announced that it will invest $10 billion in the Indian data center market over the next five years. AWS announced that it will invest $2.8 billion to build its second data center in Hyderabad in the state of Telangana. According to a Nasscom report, $5 billion will be invested in the Indian data center market by 2025.
The decision from the Finance Ministry has revitalized the entire data center industry. Organizations like Yotta infrastructure, Cyfuture, Sify Data Centers, Go4hosting, etc are building hyper scale data centers in India. Satya Nadella of Microsoft was in virtual discussions with Telangana’s IT Minister Mr. KT Rama Rao regarding kick starting of their data center projects. Colt DCS, Ascendas Singbridge Group, etc are some of the other new players that have recently joined the list of companies building data centers in India.
Digital Sovereignty
Prime minister Mr. Narendra Modi aims to achieve complete digital sovereignty. The goal is to localize data and protect the information of our citizens. This means investing in building more data centers around the country. Various policies have been introduced by the government to facilitate the development of data centers. The next big step is to become the data hub of the world. India has the potential to cater to the world’s demand for data centers.
Niranjan Hiranandani CMD Hiranandani Group said “infrastructure status to the data center is shot in the arm. It will align data centers with other prominent industries to seek long term cheap credit. This bold step will also hasten the process of achieving the goal of becoming the global data center hub”.
Why does India need massive data centers?
India has the second-largest population of mobile phone users in the world. The massive amounts of data consumption have given rise to the demand for data centers in the country. India also has the potential of becoming a global data center hub. We have a huge skilled labor force and a favorable geographical location making us an ideal destination for data center operators looking for expansion.
How will 5G affect data centers?
Data centers that were built for 4G technologies will have to undergo significant changes to accommodate 5G technology. Small cells would have to be built around the country for short 5G wavelengths. Most probably we will see small cells being installed in public places.
Moin is a techno-geek and thoroughly enjoys researching anything tech. He explores different topics and publishes them in a way that makes it easier for people to understand. He has a long list of publications on the ITES industry and contemporary technological advancements as it helps him to keep in touch with the changing trends. Cloud-based technology is one of his favourite topics as it keeps on changing and it constantly keeps him on his toes as a writer.