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Why India is a suitable destination to set up Data Embassy

Data embassy is a unique solution with a concept to ensure sovereignty, continuity, and security of the data of nation states. The nation states have begun to realize that data stored in the state-owned data centers are subject to frequent cyber-attacks, unpredictable military invasions, volatile geopolitical situations, and various geographical catastrophes. It is estimated that the global data generation is projected to grow more than 180 zettabytes by 2025. In today’s digital era, the growth of digital economy of the country heavily relies on data, making it an indispensable and highly sensitive asset for any nation state. Data embassy is the panacea to tackle the above said challenges.

A data embassy is an offshore data center, comprising a pool of servers that store the data of a specific nation and fall under the jurisdiction of that nation, despite being physically located in another nation. This solution guarantees the digital continuity of the nation state, enabling the preservation of critical databases and ensuring the seamless operation of the country even in scenarios where governing from within the country’s borders becomes unfeasible. This article attempts to bring out why India is a suitable destination for setting up of data embassy and discusses various critical success factors that are mentioned as below:

Abundant skilled resources
India is one of the largest community of engineers, technicians, and management professionals in the world that are very well-equipped with a variety of technological and management skills, positioning India as an attractive destination to get in-house resources for building techno-functional ecosystem in the country.

India is the leading country of highly skilled young talent available at an affordable cost and has the sufficient in-house capacity to fulfill the needs of Digital India. Their smart and innovative thinking enables them to effectively compete on a global level.

Cost of construction of a data center
The cost of construction of data center varies significantly, country wise, due to variations in significant cost headings like shell and core, architectural fit-outs, labor, mechanical, electrical, plumbing equipment, etc. It is estimated that the cost of setting up of a data center is USD 6 per Watt in India, USD 10.2 per Watt in Northern Virginia, USD 12.98 per Watt in Zurich, and USD 13.7 per Watt in Tokyo. India is ranked as the most attractive and favorable market for data center construction.

Low electricity cost
Data centers are the energy guzzlers, with a large part of energy consumed by IT and non-IT Infra, such as IT hardware, chillers, refrigeration, etc. India offers a unique opportunity of providing world’s lowest electricity tariff to other countries to establish data centers.

Submarine cable connectivity
India has a huge international and domestic network connectivity and is hyper connected to various territories across the globe. Currently, there are 17 international subsea cables landing in 14 distinct cable landing stations in five cities – Mumbai, Chennai, Cochin, Tuticorin, and Trivandrum. There are also domestic subsea cables in India to enable the safest and the fastest transportation of data within the country. This robust network infrastructure offers a seamless connectivity that links various countries worldwide and ensures smooth and uninterrupted digital continuity.

Land of abundant renewable energy sources
India is a sunshine rich country, situated at a central location in Asia, and is one of the global leaders in renewable energy installed capacity (hydro, wind, and solar). Notably, India is already the destination of world’s largest solar power plant, covering an area of 56 square kilometers, and has a total installed capacity of 2245 MW.

The abundant amount of renewable energy sources not only facilitates the establishment of eco-friendly data centers but also contributes to the reduction of carbon emissions. It is noteworthy to mention that India is a source of uninterrupted supply of electricity that can prevent operational downtime and loss of data through reliable power backup systems and grid stability measures.

Government support
Government of India has taken various initiatives, such as setting up of incubation facilities, tax benefits, infrastructure support, and skill development programs to transform the IT ecosystem of the country. Various schemes/initiatives such as state wide area network (SWAN), national optical fiber network (NoFN), national knowledge network (NKN), etc., have empowered India to create a robust network infrastructure, both domestically and internationally.

Powered by the Digital Personal Data Protection (DPDP) Act, India is increasingly being known as a safe and trusted place for establishing data centers. The DPDP Act provides for the establishment of a Data Protection Board of India, an independent body entrusted with overseeing the implementation and enforcement of the DPDP Act, thereby addressing personal data breaches.

In conclusion, India stands out as a highly favorable launch pad for establishing data embassies due to a combination of critical success factors that positions it as the perfect choice for establishing secure data centers. The country’s robust digital infrastructure, skilled workforce, strategic geographical position, and rapidly growing digital economy presents India as an attractive land for nation states looking for protecting their data sovereignty, securing data, and mitigating unpredictable geographical catastrophes.

This article is co-authored by Abhay Bansal, Senior Consultant, Deloitte Touche Tohmatsu India LLP.

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