India Colocation Data Centre industry to double to 1008 MW by 2023: JLL
The colocation data centre (DC) industry stood at 499 megawatts (MW) at the end of H12021
- Draft data protection bill and various Central and State Government policies to propel Indian data centre industry growth
- Personal Data Protection Bill to set the foundation for Indian colocation data centres
Note: GW* and MW*- indicates IT design power load, Colocation refers to third party data centres
India’s colocation data centre (DC)
industry is expected to double by 2023, according to JLL. The global
real estate firm expects capacity to increase from 499 megawatts (MW) IT
load in H1 2021 to 1008 MW by 2023. This, in turn,
would lead to a requirement of over five million sq. ft of real estate, as per JLL research.
and Chennai are expected to be leading DC hubs due to assured power
supply, undersea cable landings and large user markets. One of the
for the growth will also be the approval of the draft Personal Data
Protection Bill (PDP) by the joint Parliamentary Committee, which JLL
believes will represent a major milestone for India’s colocation DC
industry, which largely provides IT infrastructure
for storage and computing requirements.
importance of information in form of data has gained prominence over
the years with the entire digital revolution being driven by the usage
of data. The colocation
industry is expected to benefit from the legislation due to the
prerequisite for data storage in the country. The potential of the
industry is evident from the fact that three central legislations and
four states have enacted data centre sector policies while
four more states are in the process of notifying their policies,” said Rachit Mohan, Head, Data Center Advisory – India, Co-Head, Office Leasing Advisory – Mumbai, JLL
Central Government has outlined the importance of the sector by
formulating a Data Centre Park Policy and the creation of four Data
Centre Economic Zones that aims
to make India the global DC hub. The draft policy aims to accord
“infrastructure” status to the sector bringing in the benefits of
availing long-term credit from domestic and international lenders.
increasing digital economy has also necessitated regulations to protect
the right of Indian users by storing the details of the digital
transaction locally. The
Reserve Bank of India has issued a directive imposing data localisation
requirements on service providers/intermediaries / third-party vendors
and other entities in the payment ecosystem. The financial regulator has
issued various directives for financial
intermediaries to comply with the localisation provisions. The local
storage of digital transactions has already led to an increase in demand
for data centres from the BFSI sector,” said
Dr Samantak Das, Chief Economist and Head of Research & REIS (India), JLL.
states have realised the potential of the industry and have created
special provisions for the industry. Maharashtra, Uttar Pradesh,
Telangana, and Orissa have
dedicated DC policy while West Bengal, Tamilnadu, Karnataka and Haryana
have notified DC Regulations.
was one of the first states to include Data Centers in their Industrial
Policy. The State announced integrated Data Centre Policy in 2019. As
per the policy,
five integrated DC parks would be eligible for financial incentives and
duty waivers with minimum investment of INR.1500 crores by the
took an early lead when it announced significant initiatives in the
Information and Communication Technology policy nearly five years back
in 2016. Despite
the lack of cable landing stations, the state has provided other
incentives like land availability and power at lower cost along with
other tax waivers for DC operators.
Pradesh which has been successful in establishing Noida as the growing
commercial and industrial hub introduced the DC policy in 2021 intending
to set up 250
MW Data Centre industry. The policy has provided subsidies on land
procurement, capital and interest rates and non-financial incentives.
The state of Odisha has also provided incentives in form of land fees
and electricity subsidy and other financial incentives.