In the light of recent news, the Ministry of Electronics & Information Technology (MeitY) has released an innovative Draft Data Centre Policy. The policy is intended to simplify the clearances process for setting up data centres in India. This new development is projected to promote investment in the sector, stimulate the digital economy, meet the country’s growing computing demands, and enhance service delivery to citizens.
Understanding the Terms
Before delving into the policy’s provisions, it’s crucial to understand certain terms. A “Data Centre” refers to a protected space within a building or centralized location, which houses computing and networking equipment for data collection, storage, processing, distribution, or access. “Data Centre Parks,” meanwhile, are secure Data Zones equipped with the necessary IT and non-IT infrastructure, placed strategically to house both small and large scale clusters of data centres.
Policy Provisions and Their Significance
The Draft Data Centre Policy introduces several major provisions. Firstly, it grants Infrastructure Status to the Data Centre Sector, enabling it to avail long-term credit from lenders. This status will drive investment in the sector. Specific zones will be designated and equipped with requisite infrastructure such as roads, running water and electricity for setting up data centre parks.
The policy introduces a single-window, time-bound clearance system for all the approvals required to set up a data-centre park. This initiative aims to streamline the process and encourage setup.
An important provision is the formulation of the Data Centre Incentivization Scheme, which outlines the intended beneficiaries, applicability criteria and incentives for the sector. At least four Data Centre Economic Zones (DCEZ) will be set up to create an ecosystem of Hyperscale Data Centres, Cloud Service Providers, IT companies, etc.
To mitigate the issue of high power consumption, data centre parks are encouraged to establish their own power generation units, preferably using renewable energy sources.
Essential Service Status and Atmanirbhar Bharat Initiative
The policy decrees data centres as an Essential Service under “The Essential Services Maintenance Act, 1968 (ESMA),” ensuring a continuity of services even during times of calamities or crisis.
One provision strengthens the Atmanirbhar Bharat initiative by identifying manufacturing opportunities for data centre equipment within the country. The policy also encourages participation of micro, small, and medium enterprises and startups.
Collaborations and Committees
The policy proposes collaborations with the Ministry of Skills Development and Entrepreneurship and leading academic institutes to train large numbers of people on Data Centre, Digital and Cloud technologies. An Inter-Ministerial Empowered Committee (IMEC) would be set up to facilitate the implementation of the defined measures. Additionally, an independent Data Centre Industry Council (DCIC) is proposed to act as an interface between the sector and the Government.
Why India Needs a Data Centre Policy
India’s need for data centre infrastructure arises from several reasons including data localization norms under the proposed personal data protection legislation and the “protection of the digital sovereignty of the country in an increasingly connected world””. Other key factors include the launch of National Digital Health Mission (NDHM) and Global Partnership on Artificial Intelligence (GPAI), which involve extensive use of data.
Present Challenges and Future Prospects
At present, several impediments exist against the growth of the data centre sector such as lack of infrastructure, complex clearance processes, high cost of power, and absence of specialised building norms for building Data Centres.
However, with the new policy, India can potentially become a data centre hub for global enterprises. The future expansion of data centres will likely be supported by the growing digital economy, increasing use of social media, and rapid digitisation of services across various industries. Currently, there is no large-scale foreign investment in data centres in India, but with the introduction of these policy provisions, this scenario is expected to change rapidly.
