Government mulling to bring changes to its 2020 draft of data centre policy

The government is planning to revisit its 2020 draft of its data centre policy and bring some changes to meet the current needs and demands of the industry, as per report.

The Ministry of Electronics and Information Technology (MeitY) is also said to be considering incentives for companies establishing advanced AI and ML data centres, which necessitate larger, unified setups. The incentives include granting infrastructure status to the data centres, on par with sectors like Power, Railways and Roads.

According to a government official mentioned in the news report,it is projected that the cumulative capacity of all data centres pan India is roughly 950 megawatts (MW) and it is expected that it will double in the next two-three years.

The investment opportunity in data centres will also touch $6 billion to $7 billion by 2026, the official further added.

The new policy will enable companies in managing power costs, capital, and operational expenses by offering incentives to states for establishing dedicated zones for data center parks.  

The zones would reportedly be given tax breaks depending on the nature of the data processing being done at these places.

The news report also mentions that discussions will begin with the power ministry regarding the options for uninterrupted power supply and whether these data centres can be allowed to draw power from other states or the open market instead of the state or union territory they are domiciled in.

It is stated that one of the options at disposal is to incentivise the states or data centre parks themselves to set up captive power generation units.

MeitY in 2020 reportedly released a draft of the Data Centre Policy in which it proposed providing simplified-window clearances to aspiring data centre companies to set up operations in the country.

The draft, which was publicly discussed, put forth additional incentives for companies to use locally manufactured IT hardware including servers, storage and network devices.