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Will India face shortage in data centers capacity?

NTT’s data center capacity has been completely pre-booked in all the data center campuses which are in construction in Kolkata, Noida, Chennai and other parts of Maharashtra. Last year the Japanese conglomerate had announced its plans to invest $2 billion over the next four years in hyperscale data center campuses and undersea cables.

The company plans on spending $500 million over a span of four years. Earlier this year, NTT broke ground in the $241.5 million new data center campus in Kolkata. NTT plans on doubling its data center capacity by March 2024 according to recent reports.

The other players too anticipating this demand have gone in for major expansion. Indian corporations are investing in massive leaps forward to meet an estimated 6 million square feet of required data center services development over the next three years.

Limitations imposed as a result of the shutdown disrupted normal operations. However, this black swan occurrence significantly accelerated the country’s widespread embrace of digital technologies. The government’s push and ambition toward a digital economy gained momentum as the financial, educational, and retail sectors were all mandated to become digital.

The value of the India data center market is expected to increase from $4.35 billion in 2021 to $10.09 billion by 2027 at a compound annual growth rate (CAGR) of 15.07% throughout 2022-2027.

CRISIL predicts that by 2025, India’s data center capacity will have doubled to between 1,700 and 1,800 MW. An estimated 870 MW is the current capacity in the nation. The director of CRISIL estimates that between 2023 and 2025, India will add between 890 and 900 MW of capacity.

Similarly, the government is ramping up its digital activities to improve the environment for data center services. An important goal of data localization is to keep 75% of data inside the nation.

The Ministry of Electronics and Information Technology (MEITY) saw potential in the industry. So it developed a strategy for data centers in 2020, elevating them to a higher “infrastructure status” as roadways, rails, and electricity. This policy aims to streamline the approval procedure for data center services. For example, getting a data center up and running in the nation might take as many as 40 approvals.

The Ministry of Economy, Industry, Trade and Energy (MEITY) has announced that cloud data centers will get SEZ designation. In addition, the government would offer free land, water, and power so businesses could set up shop with little hassle.

Data center services may benefit from tax breaks in states like Maharashtra, Karnataka, and Uttar Pradesh, as well as energy subsidies and discounts on land costs.

CT Bureau

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