While reading the quote “If granaries are important for grains and food grains, if a warehouse is important for manufacturing goods, a good datacentre is very important for a digital economy.” from Shri Ravi Shankar Prasad, Minister for Communications, Electronics & Information Technology and Law & Justice, Government of India, on a datacentre launch; I could only think of the corollary where if data is the new oil then datacentres are the new strategic reserves.
Also, one fact that clearly comes out from this quote is that a good datacentre infrastructure is the backbone of a successful digital economy. While we were doing our report “India – The Next Datacentre Hub” we heard the same sentiment being echoed from the industry veterans as well, where they were completely in support for increased investments in the sector which are crucial for making India a digital economy. This is also reflected in some of the recent announcements by that have come in such as:
- Adani Group’s JV with US firm EdgeConnex to build data centre parks in 6 Indian cities
- Hiranandani Group’s plan to set up a datacentre park in West Bengal
- ST Telemedia’s plans INR1,100cr data centre campus in Noida
The pandemic has also been a key factor that has pushed the demand for digitisation and in turn datacentres. Consequently, we expect datacentre investments in the country to increase to $4.6 billion per annum by 2025 in a business as usual scenario, with an expected share of ~2.5% in the global market by 2025 and a 1.3X growth over 2019.
These investments can get further push if the government is able to put some of the recommendations we have put together from the industry in practice.
Some of the key recommendations for the government include:
- Faster implementations of the recent datacentre draft policy
- Promote use of renewable energy including natural gas for powering datacentres
- Level playing field should be provided for all datacentre investments
- Policy should encourage deemed approval system for regulatory clearances
- Domestic production may be incentivized, however the policy may ensure there are no unnecessary barriers for import of specialized equipment which would be critical for growth & efficiency of datacentres in India
- BIS approvals for equipment used in datacentres needs to be expedited
- Digitisation of RFPs to lead by example.
With these recommendations in place these investments can go up to $6.0-$8.0 billion per annum increasing India’s share in the global market to 3%-4%.
Find more details on the recent datacentre policy, and other recommendations in our report “India – The Next Datacentre Hub”. It also highlights the key market trends and drives as well as key datacenter site selection criteria and India’s position across these parameters. Happy Reading!!