Role of Datacenter Parks
Datacenter parks in the public-private partnership (PPP) announced by the finance minister Nirmala Sitharaman in her budget speech last year is probably meant to ensure that businesses find this proposition economically viable. It will not be surprising if further incentives are announced for locating data centers within designated data center parks, much in the same line as manufacturing SEZs or Software SEZs/STPs.
"It is now a cliché – "data is the new oil” and it is true that Analytics, Fintech, and the Internet of Things (IoT) are changing the way we deal with our lives,” said the minister in her speech.
“To take advantage of this, I propose to bring out soon a policy to enable the private sector to build Data Center parks throughout the country. It will enable our firms to skillfully incorporate data in every step of their value chains,” she added. The objection to data localization requirements in the draft Personal Data Protection Bill is from two quarters—the activists and the corporates. For the first set, it is a question of freedom; the second set—which the government wants to address—had reservations primarily, if not only, because of commercial reasons.
The establishment of data center parks—with some possible incentives to locate a data center in it—is one way of addressing those concerns.
The objective seems to be three-fold:
1. Minimize the opposition to data localization requirements by businesses by making the local data centers far more viable economically.
2. Make it attractive for small businesses to host their data in well-managed, world-class data centers. This goes well with the government’s thrust on MSMEs and digital India.
3. Make India a favored destination for global data centers, as the demand explodes. If the hyper-scale providers find it attractive, much of the opposition to data localization will go anyway.
India is witnessing a transition from an emerging to a developed market economy and digital is slated to play a key role in this journey. Digital is not only catalyzing economic growth across all sectors and sub-sectors but also forms the bedrock for providing better services to citizens, enabling social and financial inclusion, enhancing productivity, and helping create a connected ecosystem. 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.
With over a billion mobile phones and more than 700 million internet subscribers, India has also witnessed an exponential growth in digital-commerce, digital entertainment, and use of social media. India’s mobile data consumption is already the highest in the world and is constantly increasing.
The size of the digital population in India and the growth trajectory of the digital economy necessitates a strong growth of Data Centres, which has the potential to fulfill the growing demands of the country. Indian Data Centre market has seen tremendous growth in the past decade, riding on the explosion of data through smartphones, social networking sites, e-commerce, digital entertainment, digital education, digital payments, and many other digital businesses/services. This growth in data is further stimulated by the adoption of emerging technologies such as quantum computing, artificial intelligence, the internet of things, etc.
This has been supported by various efforts of government in form of various enablement for the sector.
Need for Data Centre infrastructure within the boundaries of the country are further necessitated by the data localization provisions of the proposed Data Protection Act and for protection of the digital sovereignty of the country in an increasingly connected world. India also offers advantages of having a favorable geographical location on the world map, availability of economic resources, established global connectivity through submarine cables, easy and cost-effective access power, and readily available skilled manpower provides, enabling the nation to become a global Data Centre Hub.
India has the potential to emerge as the World’s largest hub for data centers considering that the country is home to 1.15 billion mobile users, 661 million broadband users, 376 million social media users, 401 million smartphone users, and 564 million internet users. India is the world’s second-largest base for mobility, internet users, social media users.
All the above factors may play a key role in helping India emerge as the World’s Largest Data Center Hub.
The author is Anil Kumar Jain, CEO, National Internet Exchange of India (NIXI)
