Government wants to make India a data centre hub, plans Rs.12000-crore sops

  • 24Aug 2021

    An ambitious incentive scheme worth up to Rs 12,000 crore is in the works to encourage companies to set up data centres in the country, The government is targeting an investment of Rs 3 lakh crore in the next five years as part of the hyperscale data centre scheme and is planning to provide between 3% and 4% of the capital investment as incentive to companies, along with real estate support and faster clearances. Government officials said the vision is to “make India a global data centre hub” and termed the scheme’s target as the largest so far in terms of expected investment in the country over a period of just five years.

    The policy is currently being circulated for inter-ministerial consultations and is expected to be sent for cabinet approval after it is finalised. The quantum of the incentive is still being discussed and could be in the range of Rs. 10,000 crore to Rs. 12,000 crores. “Our vision is to make India a global data centre hub. We have proposed that the ease of doing business has to be improved and the bottlenecks have to be addressed,” a senior government official told ET.

    In the recent past, several multinational technology companies such as Microsoft, Amazon and Google have set up data centre regions in the country. Domestic firms such as Adani Enterprises and Hiranandani Group have also announced aggressive plans to set up data centres in Noida in the National Capital Region. “No other scheme has such ambition in such a short time, so this will be a major game changer for high-tech industry in India. We want to invite Rs 3 lakh crore worth of investments in data centres in India in next five years,” the official added.

    The scheme, which is being spearheaded by the Ministry of Electronics and IT, will also look promote domestic manufacturing of high-end servers. “Our focus has been on mobile manufacturing so far; this will change in a very significant way. There will be an incentive of specified percentage on the purchase of servers from domestic manufactured sources which can be deployed in the data centres,” the official said.

    India is fast emerging as a location of choice for data centre majors. According to the latest data from Cushman & Wakefield, investment worth a total of $11.4 billion has been planned and committed for the development of data centre in the country and the contribution of global firms in this is more than 65%.

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