Dr Ujjwal Kumar, Special Secretary, Department of IT and Electronics, Government of Uttar Pradesh

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.

Investment proposals

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.

Attracting investors

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.

Challenges

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.

Conclusion

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.