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Data Center Policy 2020: Key Excerpts

With the vision to “make India a global data center hub, promote investment in the sector, propel digital economy growth, enable provisioning of trusted hosting infrastructure to fulfill the growing demand of the country, and facilitate state-of-the-art service delivery to citizens”, the Ministry of Electronics & Information Technology, Government of India has released the draft of its Data Center Policy.


Here are few significant excerpts from the 16-page document, published on November 5, 2020:

Envisioning a Booming Digital Future

> “The size of the digital economy in India is estimated to grow from $ 200 billion in 2017-18 to a staggering $ 1 trillion by 2025.”

> “Indian Data Center market has seen tremendous growth in the past decade…This growth in data is further stimulated by the adoption of emerging technologies such as quantum computing, artificial intelligence, internet of things etc.”

> The country has a “potential opportunity for investments of the order of USD 4.9 billion by 2025, which could be further increased…Currently, India has around 375 MW installed power capacity for Data Center and as per projections, this may grow to three times by 2025.”

Promising Strategies for Growth

To enable ease of doing business through:

> Providing infrastructure status to the data center sector

> Simplifying clearances for setting up data centers in India

> Setting up of pre-provisioned data center parks

> Formulating Central and State Government schemes, guidelines for fiscal and non-fiscal incentives in the sector

> Formulating the data center Incentivization Scheme (DCIS)

To enable a favorable ecosystem for the operations of data centers for long-term data center growth through:

> Ensuring the availability of uninterrupted, clean, and cost-effective electricity for Data Centers

> Working with the Department of Telecommunications (DoT) to facilitate robust and cost-effective connectivity backhaul

> Declaring the data center sector as an essential service under The Essential Services Maintenance Act, 1968 (ESMA)

> Recognizing data centers as a separate category under the National Building Code

To set up at least four data center Economic Zones (DCEZs), the benefits of which will include:

> Both private sector as well as public sector data center Parks /data center Developers and data center Operators

> The most conducive non-IT and IT infrastructure, connectivity, power and regulatory environment

> An eco-system of Hyper-scale data centers, Cloud Service Providers, IT companies, R&D units and other allied industries

To promote indigenous technology development, research and capacity building through:

> Promoting local manufacturing

> Encouraging joint ventures between the foreign investors and domestic companies

> Promoting R&D in data center ecosystem

> Promoting the adoption of established global standards

> Promoting global adoption of services from state-of-the-art data center infrastructure available in India

> Ensuring capacity building and human resource development

To bring about an institutional mechanism for policy governance through:

> Setting up an Inter-Ministerial Empowered Committee (IMEC) 

> Institutionalizing data center Facilitation Units (DCFU)

> Proposing to set up an independent data center Industry Council (DCIC)

> Undertaking mid-term evaluation of the policy and propose modifications/ amendments, if required

At its core, the data center policy aims to give the sector a more important place in the country’s economy by bringing data centers under infrastructure, listing the data center industry as an essential service, improving governance, and promoting local involvement in the industry.

If implemented effectively and monitored meticulously, it can definitely boost the already booming data center industry in India, turning the country into an investment hub for companies across the globe. 

Read the entire policy draft here.

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