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Summary: MEITY’s draft Data Centre Policy, 2020 emphasises bandwidth demand, data localisation

Update (November 19): The last date for submission of comments to this consultation has been extended to November 25.

Data centre infrastructure in India is “necessitated by the data localization provisions of proposed Data Protection Act and for protection of the digital sovereignty of the country in an increasingly connected world,” the government said in a draft Data Centre Policy published on November 5. The Ministry of Electronics and Information Technology has given stakeholders 15 days to comment on the policy, which purports to transform India into a global data centre hub and reduce the hurdles to set up a data centre in the country. Data centres are critical to the functioning of the internet, and as Indians’ data use grows exponentially, data centres are essential plumbing for both internet users as well as businesses and the government.

The policy also seeks to create a new industry body to liaise between the data centre industry and the government, the Data Centre Industry Council (DCIC), to be initiated by MEITY. This is similar to the cloud service provider industry body suggested by the TRAI to the Department of Telecommunications, which was resisted by industry associations. It’s unclear if data centres will also find fault with the proposed DCIC, as in this case, MEITY does appear to have jurisdiction over this industry.

An Inter-Ministerial Empowered Committee (IMEC) will be formed to implement the policy, chaired by the MEITY Secretary, terms of which will be notified by MEITY later.

Designating data centres as ‘infrastructure’

The policy seeks, in the same breath, to promote indigenous manufacturing (“reducing the overall import burden of the country”) and local involvement in data centre businesses, while also courting foreign investment. It is important to “reduce dependence on imported equipment for Data Centres,” the policy says. In addition, it will

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  1. Essential service, infrastructure status: By designating data centres as “infrastructure” as opposed to “industry”, the draft policy argues, the sector will be able to access credit more easily. Infrastructure status has been accorded to roadways, railways and electricity grids. Data Centres would also be designated as an essential service under the law, much like telecom networks.
  2. Data Centre Incentivization Scheme (DCIS): A scheme will be formulated to provide “fiscal and non-fiscal” incentives to data centres, indicating tax breaks for the sector.
  3. Land parcels: States and union territories will be “encouraged” to provide land parcels for Data Centre Parks, along with the municipal supplies that this would entail, like water, electricity and so on.
  4. Fast clearances, cheap power: The policy says it is important to “Institutionalize processes for granting single window clearance, in a time bound manner by State Governments/UTs.” To that end, it also suggests standardisation in terms of security, build, “IT [and] non-IT”, and the creation of a category for data centres in the National Building Code, 2016. In addition, it bats for data centres to be provided access to “uninterrupted, clean and cost-effective electricity for Data Centres”. A steering group will be created to execute this priority, consisting of MEITY, the Ministry of Power, and state governments.
  5. Robust and cost-effective backhaul: MEITY said it would work with the Department of Telecommunications to make sure that data centres have access to fibre bandwidth, through utility corridors, common service ducts, infrastructure sharing, a Dial Before You Dig Policy, and improved international connectivity and cost of bandwidth.

Schemes and skilling proposed

The draft policy also proposed a slew of schemes and programs to support data centres. Such as:

  1. Data Centre Economic Zone Scheme (DCEZ): The DCEZ scheme is proposed as a central sector scheme to, for a start, set up four data centre economic zones, with the “most conducive non-IT and IT infrastructure, connectivity, power and regulatory environment.” This is likely going to mean fewer regulations, much like in Special Economic Zones (SEZs).
  2. Capacity building for data centres: MEITY will work with the Ministry of Skills Development and Entrepreneurship to “impart large scale trainings to workforce on Data Centre, Digital and Cloud technologies, and facilitate sector linkages for such trained workforce.”
  3. Data Centre Facilitation Unit: MEITY seeks to create a Data Centre Facilitation Unit that will provide “harmonised services” to developers seeking to build data centres or data centre parks. The DCFU would be the “nodal agency to work under the Inter-Ministerial Empowered Committee to drive and support the implementation of decisions taken,” MEITY said, adding that it would monitor the policy’s progress as well.
  4. Encourage JVs and domestic manufacturing: The policy says it hopes to encourage joint ventures between foreign investors and Indian companies to encourage capacity-building and push for exports of data centre-related exports.

Read the draft Data Centre Policy 2020 (Deadline for comment is November 25. Comments to be sent to uma.chauhan@meity.gov.in and cmo@meity.gov.in). If you would like us to feature your comments on the policy, please send your submission to edit@medianama.com)

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I cover the digital content ecosystem and telecom for MediaNama.

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