India Marching ahead with Digitization

Over the years, India has emerged as one of the fastest-growing economies in the world and an attractive investment destination driven by economic reforms and a large consumption base. A host of factors has enabled this growth, which includes a highly developed financial system, infrastructure requirement and proactive Government initiatives. Domestic and foreign investment has made an impact on the country’s growth.

India's progress towards becoming a true digital economy, backed by progressive government policies, is encouraging domestic and global data centre operators to make huge investments in the country.

The shift towards cloud has pushed increased investments in hyper-scale data centers with the global data centre market investments expected to reach $200 billion per annum by 2025. India is also expected to get a share in this growth with investments in the country expected to reach $5 billion per annum by 2025. But to meet this rising demand, India will require a huge investment in data center and cloud infrastructure over the next three years.

Demand is likely to ramp up further due to the imminent rollout of 5G, increasing usage of IoT-enabled devices, data localization and cloud adoption. The businesses are looking to adopt cloud servers and surging cloud applications will make it imperative for businesses to have a reliable and secure IT infrastructure, where data can be stored and processed effectively.

Data Centers are the backbone of a digital revolution. The Government of India's proposed Draft Data Center Policy aims to make India a 'Global Data Center Hub'. This will provide long-term funds for investments in the sector. State Governments have also been providing incentives to industry players for setting up data center parks.

The synergy of technology, legislation, demand, and investments is expected to usher in an era of high growth for India's DC industry in coming years. As India emerges as one of the fastest-growing data economies, India's adoption of cloud technologies will be imperative to tap into the global cloud market to help enterprises and the industry embrace this opportunity and further the Digital India agenda of Government of India.

As part of the policy framework, the Ministry is looking at reducing the number of clearances needed for setting up a data center. Accordingly, plans are on to discuss the matter with Central ministries and State governments for possible alignment on this subject.

Data centers need about 40 clearances, which takes a lot of time. However, experts predict, as the consolidation is on the move, going forward by 2023, there will be only 4 to 5 data centres in the country to rule the roost, we will see a fast-track merger and acquisitions to happen in the Data centre industry.