With digitization permeating all aspects of life and regulatory focus on data localization, it is necessary to ensure that the data centre industry does not develop in a regulatory vacuum.
Landmark changes

  • The draft Data Centre Policy 2020 was introduced by the Ministry of Electronics and Information Technology (MeitY) with the vision to make India a Global Data Centre Hub. It
    outlines strategies for growth of the Data Centre Sector by attributing it with an “Infrastructure Status” to enable easier access to credit, suggests Incentivization Schemes, and setting up of specific infrastructural zones (called Data Centre parks). It proposes the declaration of Data Centres as an ‘Essential Service’ under The Essential Services Maintenance Act, 1968 to enable continued services. It further depicts various ways to improve national and international connectivity to attract investment, along with setting up of Data Centre Economic Zones with an institutional mechanism for their governance.
  • Apart from the draft Data Centre Policy introduced by the Ministry of Electronics and Information Technology (MeitY), several states have adopted state data center policies that aim to promote data centre operations by providing incentives and support, and reducing red- tape
  • Maharashtra’s data centre policy is enshrined in the states 2015 IT/ITES policy coupled with a 2016 circular that provides fiscal incentives to eligible data centers.
  • Telangana’s Data Centres Policy was introduced in 2016 and provides fiscal incentives (such as rebates on building fee and subsidised land) and non-fiscal incentives in the form of exemptions, such as from statutory power cuts, and in some cases from the State’s pollution control legislation.
  • Tamil Nadu’s Data Centre Policy was unveiled in 2021 and seeks to make the application process, including obtaining clearances, easier. It also provides incentives in the form of
    subsidies and stamp duty concessions, among others.- The Uttar Pradesh Data Centre Policy was released in 2021 and also provides incentives in the form of various subsidies, stamp duty exemptions, and exemptions from certain state specific labour legislations.

Recent Developments
While several states have taken the initiative to enact state specific data centre policies, the national data centre policy still remains in the draft stage. It should also be noted that data centre policies at this stage have focused solely on issuing incentives and providing exemptions to encourage and attract investment. The governance aspect should not be ignored while formulating policy.

Ministry of Electronics & Information Technology (MeitY)
Department of Telecommunications

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