Data centres are designed to support business apps and provide services such as storage, data backup, productivity applications such as high-volume procedures, e-commerce, big data, artificial intelligence, and machine learning. To accelerate the development of the data centre ecosystem in Uttar Pradesh, the state government has launched its own data centre policy. At tele.net’s recent conference on “Data Centres in India”, Dr Ujjwal Kumar, special secretary, Department of IT and Electronics, Government of Uttar Pradesh, discussed key features of the state’s data centre policy, incentives being offered and the government’s plans to develop the state as a data centre hub. Edited excerpts…
Key features of the data centre policy
The state data centre policy aims to build a conducive environment for the data centre industry to flourish in the state. Locational advantage, an advanced IT ecosystem and premium-level quality talent are the key ingredients that make Uttar Pradesh a promising destination for the sprinting data centre industry. Through this policy, Uttar Pradesh aims to develop 250 MW of data centre capacity in the state and attract investment worth around Rs 200 billion. The policy has dedicated incentives for data centre parks and units, where a minimum of 40 MW capacity for locating data centres is considered under the definition of data centre parks and less than 40 MW comes under the definition of data centre units.
For data centre parks, there is a provision of interest subsidy of up to 60 per cent of the annual interest, with an overall ceiling of Rs 500 million. Data centre units are eligible to get around 7 per cent of the capital subsidy, up to Rs 200 million on fixed capital investments. Further, 25 per cent land subsidy is being given in the Madhyanchal and Paschimanchal regions and 50 per cent in the Bundelkhand and Purvanchal regions, including 100 per cent stamp duty exemption. There are provisions for power related subsidies such as dual-grid power supply, exemption on building or transmission charges, banking charges, etc.
The policy also offers certain non-financial incentives, including a special provision in building norms such as parking relaxation, multilevel stacking, up to 60 per cent ground coverage, 24×7 power and water supply and various other support features.
After the launch of the policy, we have received 13 proposals from global data centre players wanting to set up their data centres in Uttar Pradesh. Most of these investors proposed to set up their data centres in the National Capital Region, which has already proved its mettle as a key information technology (IT) hub in the country. In particular, Noida, with its strong IT ecosystem and employable quality talent, has become a promising destination for investment in the data centre industry. For instance, the Hiranandani Group has already laid the foundation for the establishment of its 20 acre data centre park in Noida and the first building of 30 MW is under construction. Other big investors including Adani, NTT Global, Rackbank, IndoSpace Capital Advisors, and CTRN have also submitted their proposals. The 13 investment proposals received so far, promise a cumulative investment value of around Rs 200 billion, which is more than the stated target in the policy.
We have a dedicated website for attracting investors. Further, we are planning to publicise our data centre policy throughout India as well as in foreign countries. We also have a dedicated team of consultants working to make this procedure a big success. We are hoping to attract more and more investors in the near future. As of now, we are only looking at private investors. However, in case we get any public-private partnership proposals in the future, we might consider them. We are expecting to begin business with some of the investors by next year.
A major challenge lies in attracting investors. For us, most of the investment comes for Noida only. However, our vision is to establish data centre parks all over the state. So, we are hoping that some investors come in for the Purvanchal and Bundelkhand regions as well because land availability will not be a problem there.
Another major challenge is that of infrastructure, which is also being worked out. Recently, the government has dedicated the Purvanchal expressway to the country. So, investors should look at these decisions as well.
Data centres have been critical to the success of businesses and the industry will continue growing in the years to come. Uttar Pradesh, being the largest state in the country, with Noida at the epicentre of the IT industry, is in a leading position to drive data centre demand.