Bhaskar Bhattacharya, Executive Vice President, Enterprise Business, Aurionpro Solutions Limited
The data centre industry in India is growing at a fast pace, as data generation and consumption, along with digital transformation, are also on the rise. According to a recent report by JLL, the industry’s capacity can cross the 1 GW mark by 2023 – twice of what it was (499 MW) during the first half of 2021.
This is the compounded effect of the government’s push for digital adoption, the conferring of “infrastructure” status on data centres, and private enterprises undergoing digital transformation. Further, new-age start-ups setting up and using digital platforms to launch new services and products such as fintech, insurtech, aggregators and marketplaces; the need to store vast amounts of data in order to consolidate it; machine learning and artificial intelligence are also driving growth. The advent of 5G, the ever-increasing use of data, cloud consumption and real-time applications will usher in high growth in the future.
A look at some of the key areas where localisation of data centre facilities can be the catalyst of growth for the digital economy…
Data localisation
Data localisation, simply put, means curbing the flow of data to foreign lands. The Government of India has issued guidelines to this end. It had also issued a draft bill called the Personal Data Protection Bill, 2019 (in line with the European Union’s General Data Protection Regulation), which mandated storing and/or processing the data of Indian citizens within the country’s geographical boundaries. However, it was withdrawn in August 2022, and a new bill is being devised.
GoI push for growth
In the Union Budget 2022, the finance minister, Nirmala Sitharaman, accorded “infrastructure” status to data centres. This will help facilitate credit availability for digital infrastructure and green energy storage.
Additionally, many state governments are bringing in data centre-specific policies to provide power, land and connectivity infrastructure along with fiscal and non-fiscal incentives. These policies offer such benefits as 50-100 per cent exemption from stamp duty and a 100 per cent subsidy on electricity tax for power purchased from a state utility. They also offer preferential public procurements, open access to draw power, uninterrupted redundant power and water supply connections with specific building codes for data centres.
This is similar to the software export incentives that were in place in India from 1997 till 2012. They offered a zero tax scheme for the software service industry operating from the software technology parks and special economic zones. This resulted in a massive growth of India’s IT industry, catapulting it to become the world’s largest software service industry.
Better data accessibility
Indian communication service providers are expanding 4G networks and are preparing for the launch of 5G. Multiple initiatives have been introduced by the government, such as smart and safe cities, drone-based delivery, land record digitisation and other e-governance initiatives. All of these are dependent on a large infrastructure base, which will help them drive better data governance. This includes the BharatNet initiative, which will help bring connectivity to even the remotest locations in the country.
5G services to drive growth in data consumption
Businesses and service providers will continue to evaluate the most price-effective ways to boost capacity and capability for 5G implementation plans. When it comes to data centres, 5G offers faster access to information, enabling more edge data centre deployments. Cloud core 5G will considerably increase data centre construction by private companies.
Cost optimisation and reduction of carbon footprint
Leading industrial organisations such as the Confederation of Indian Industry are striving to create guidelines for India that will help data centres become more energy efficient and green, in an effort to minimise their carbon footprint and operational costs. The adoption of sustainable power sources such as solar/wind/biomass for auxiliary loads and new building construction techniques to reduce heat absorption, use of energy efficient products in electrical and mechanical systems, and setting up of waterside and airside economisers to extract free cooling (from the atmosphere) in order to reduce cooling loads, are all part of the new design paradigm. A focus on data centre automation and real-time monitoring of all crucial metrics, such as energy efficiency, follows logically from these power usage effectiveness measures.
Better data security
Security is one of the main benefits of a local data centre. One can use in-person security features to protect the servers. As technology continues to evolve, it will become harder for companies to handle the explosion of data internally. This will be at the core of stimulating innovation and finding new ways of doing business across sectors.
