Tamil Nadu is the hotspot of the Indian data centre industry. This can be attri­buted to multiple factors, such as the strategic location of Chennai, as well as its reliable bandwidth, sustainable power sector and enabling IT ecosystem. Proactive government initiatives and investor-frien­d­ly policies have further facilitated the in­d­ustry’s growth.

Tamil Nadu has surplus power, with over 50 per cent of it based on rene­wable energy, which has attracted several companies to the state. It has over 30 per cent of the country’s subsea cables, conn­ecting 264 landing stations globally. With six submarine cables offering 14.8 tbps of capacity in Chennai and 1 tbps in Tuti­co­rin, these cities offer the largest bandwidth connectivity among Indian cities and are the closest landing stations connected with the west coast of the US. Two of the most preferred investment destinations for data centres in Chennai are Ambattur and Siruseri.

Government initiatives

The Tamil Nadu state data centre is the first ISO-certified state data centre in the country. The state government has also set up a disaster recovery centre, cloud computing facilities and common service centres to improve the access of citizens to on­line government services. It is un­dertaking or participating in programmes such as the Tamil Nadu state wide area network, the Natio­nal Knowledge Network, Bha­rat­Net and Tamil Net to improve teledensity and broadband penetration and ensure a reliable and efficient te­le­com network th­roughout the state. Further, the Elec­tr­o­nics Cor­po­ration of Tamil Nadu (ELCOT) has developed IT parks in Tier I and Tier II cities, spread across 1,377 acres of land in eight locations.

The government recognises the power-intensive nature of data centres. To this end, it is upgrading the power infrastructure and working on a five-year plan (until 2027) to meet the energy requirements of the data centre industry. In addition, to promote Tamil Nadu as an ideal data centre investment destination, the government has decided to provide fiscal and non-fiscal incentives to data centre developers and operators.

Data Centre Policy 2021

The state government launched the Tamil Nadu Data Centre Policy 2021 with the aim to make the state a top destination for investors; make available world-class infrastructure with an emphasis on sustainability through the promotion of green technologies; and encourage research, development and innovation in the data centre segment in the state. In view of the criticality of power for data centres, the gove­rnment has worked out an industrial tariff of around Rs 6.75 per unit. Data centre units or parks are eligible for a 100 per cent subsidy on electricity tax on power pur­chased from Tamil Nadu Generation and Distribution Limited, or generated and consumed from captive sources for fi­ve years from the date of commencement of commercial operations. In addition, the government has augmented the power capacities based on companies’ requireme­nts and their technical infrastructure. Fur­ther, projects utilising renewable energy and undertaking green and sustainable initiatives will be incentivised.

Data centres are critical infrastructure facilities demanding extensive planning to prevent interruptions and are significantly different from other buildings. Tailor-made building regulations to improve spatial efficiency and optimise operational costs have been a significant feature of this policy.

To promote the growth of micro, small and medium enterprises (MSMEs), data centres that use the services of Tamil Nadu-based MSMEs for on-site services as sub-contractors to the facility manager will be reimbursed 10 per cent of the re­muneration paid to the MSMEs. A training subsidy of up to Rs 10,000 per person trained per month will also be provided for up to six months. For projects of strategic importance, a structured package of assistance will be provided for investments greater than Rs 20 billion in eligible fixed assets on a case-to-case basis.


The data centre policy and facilitation measures undertaken by the government have been well received by operators and investors. The sta­te has received an investment commitment of over $4.5 billion from 18 data centre operators. Of these, ar­o­und 15 per cent have comm­enced operations, while 45 per cent are at an advanced stage of construction and are expected to inaugurate their data centres by the end of 2023. Fu­rther, by 2025, the expected IT load in the state will be over 500 MW. s

Based on a presentation by

Sowmya Tankala, Associate Vice-President, Guidance Tamil Nadu