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NASSCOM Submits feedback on the draft Data Centre Policy to MeitY

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NASSCOM submitted its feedback on the draft Data Centre Policy to MeitY on 30th Nov 2020. A summary of our suggestions is below.

  • Definitions: The definitions of ‘data centre’ and ‘Data centre operator’ needs to be changed to make it legally sound and to capture all business model used in the sector.
  • Use of clean Energy: The policy should also promote, use of Natural Gas apart from renewable energy for powering Data Centres. It should also enable the use of Virtual Power Purchase Agreements (VPPAs) and support the direct transfer of renewable energy certificates to end-consumers. Further, currently, in many states, the existing regulations around open access and banking of power restrict/disincentivise companies from using renewable energy round the clock. There is a need for the policy to analyse the impact of these rules and enable a holistic framework that can address these challenges across the country.
  • Common Service Ducts: The draft policy intends to encourage and facilitate creation of infrastructure that can reduce fibre cuts. Further, MeitY should work with Department of Telecom (DOT) to enable policies that would provide new optic fibre cable entrants (non-carriers) access to public rights of way in municipalities and rural areas so that they can offer competing services that drive down prices for all users.
  • Fiscal Incentives: The draft policy proposes fiscal and non-fiscal incentives for the promotion of Data Centre Parks and Data Centres. We suggested that a level playing field should be provided for all Data Centre investments and hence the incentives be not restricted to investments made in the proposed Data Centre Economic Zones or tied to any other location-based criteria. Also, Data Centre companies should be allowed to avail incentives under available schemes based on the time period of actual investment, regardless of whether the investment is in a new data centre project or an existing data centre project.
  • Ease of Doing Business: We welcome these proposals and believe if implemented efficiently, these measures can reduce the time taken for regulatory clearance significantly and improve ease of doing business considerably. However, we are of the view that the policy should go beyond these proposals and encourage deemed approval system, which can improve the certainty of regulatory clearance manifold and incentivise government agencies to act on applications within the specified timeline.
  • Technical Standards: The draft policy intends to ensure certain minimum standards for Data Centres by mandating certain standards. While we welcome the proposal to publish certain standards for adoption, we believe the Data Centres should have wider choice to choose from based on the customer requirements and therefore the govt should avoid mandating a few selected standards.
  • Testing and Certification framework: The draft policy intends to strengthen the testing and certification framework for equipment and software used in Data Centres. We suggest whenever specific steps are taken in regard, the Government should consider adopting global standards and not provide for separate domestic standards for testing and certification. Further, relevant industry stakeholders be consulted before the framework is specified.
  • Incentives for domestic production: The policy intends to promote local manufacturing of equipment used in Data Centres and proposes incentives for usage of domestic equipment. Though domestic production may be incentivized, policy may ensure there are no unnecessary barriers for import of specialized equipment which would be critical for growth & efficiency of Data Centres in India.
  • Data Centre Industry Council: The policy envisages a new committee to act as an interface between the Government and the industry. We suggested the Data Centre Industry Council may comprise of relevant industry associations.
  • Guidelines and Schemes: The draft envisages certain schemes and guidelines that will be published to implement this policy. We requested that the relevant industry stakeholders be consulted before notifying such guidelines, schemes, etc.

Our submission is attached for reference.






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