New Data Centre Policy to Attract Capital

The proposed National Data Centre (DC) policy aimed at simplifying existing rules, and giving it “infrastructure” status could see big ticket investments in this space. Since the onset of Covid-19, data consumption globally ha

BY Realty Plus
Published - Thursday, 19 Nov, 2020

New Data Centre Policy to Attract Capital

The proposed National Data Centre (DC) policy aimed at simplifying existing rules, and giving it “infrastructure” status could see big ticket investments in this space. Since the onset of Covid-19, data consumption globally has surged; in India too, it has gone up on the back of work from home, tele-medicine, online education and digital commerce. This, coupled with the upcoming Personal Data Protection Law, has made the IT Ministry to come up with a framework for data centres. At the outset, the government seems to have ticked many check boxes from simplification of rules to creating zones, which are currently restricted to Navi Mumbai, Chennai and Hyderabad. The need for capital stems from the fact that DC is a capital-intensive sector with a long payback period, where a handful of players have around 80 per cent market share. These include NTT-owned Netmagic, Ctrl S, Hiranandani-owned Yotta Infrastructure, Amazon, Microsoft, Oracle and others. As data use grows exponentially, DCs are critical to the functioning of the internet.The Indian data centre industry has clocked $1.2 billion in revenues in fiscal 2020 and Crisil expects the industry to log a rapid 25-30 per cent CAGR to $4.5-5 billion by fiscal 2025. Additionally, the government is looking at ease of doing business in the form of fast clearances, cheap and clean power: The policy emphasises single-window clearance in a time-bound manner by State governments, standardisation in terms of security and the creation of a category for data centres in the National Building Code, 2016.