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Amid India’s data localisation priorities, Airtel data centres to get a Rs 5,000 crore push

Airtel’s data centre subsidiary Nxtra hopes to triple its current capacity, but the telco says sustainability is also a key issue.

An investment of Rs 5,000 crores by 2025 has been earmarked by Airtel towards its subsidiary, Nxtra by Airtel, its data centre business, according to a press release by the company. The telco said that the capital will be used to augment its network of hyperscale and edge data centres which includes new data centre parks in key metro cities.

Nxtra is targeting an installed capacity of over 400 MW on account of this investment. The subsidiary currently operates 10 large and 120 edge data centres across India and manages critical submarine landing stations. 

What does Nxtra do? The company’s mandate consists of offering integrated data solutions to global hyperscalers, large Indian enterprises, startups, SMEs, and governments.

India’s demand for data centres is increasing as it inches towards the 5G rollout coupled with an acceleration in adoption of technology due to the pandemic. Businesses are now making the transition to cloud which will need to be facilitated by data centres. They will also need to comply with the local data storage mandates like the Reserve Bank of India’s data localisation guidelines for payment companies. These guidelines will require companies to store all user data in India thereby necessitating the need for a robust data infrastructure. 

‘Will focus on sustainability’

  • Nxtra said that the expansion will be undertaken keeping sustainability in mind as data centres guzzle a lot of electricity. 
  • The company will be sourcing 50 percent of its energy requirements through renewable sources. 
  • It has commissioned captive solar power plants in Uttar Pradesh and Maharashtra with more plants in the pipeline.
  • The initiative will be a part of Airtel’s overall greenhouse gas emission reduction targets.

Push for more data centres

An incentive scheme of Rs 12,000 crore was proposed by the Indian government to encourage companies to set up data centres across the country, as per an Economic Times report in August. 

The report said that the government is expecting an investment of ₹3 lakh crore, from domestic and international companies, in the next five years as a part of the hyper-scale data centre scheme. 

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The government is also planning to provide other incentives such as three per cent to four per cent of capital investment, along with real estate support and faster clearances.

Key takeaways from the Draft Data Centre Policy, 2020 

The Ministry of Electronics and Information Technology (MeitY) had introduced the Draft Data Centre Policy in 2020 which is currently awaiting cabinet approval. Here are a few key features of the policy: 

  • The policy sought to create a new industry body, Data Centre Industry Council (DCIC) to collaborate with the data centre industry and the government. MeitY would have jurisdiction over this industry body. 
  • An Inter-Ministerial Empowered Committee (IMEC) would be formed and chaired by the MeitY secretary.
  • The policy claimed that it would promote indigenous manufacturing, by reducing the overall import burden of the country, and local involvement in data centre businesses, while also courting foreign investment. 
  • Provision of Infrastructure status: The policy would designate data centres as “infrastructure” instead of “industry” in order to make credit easily accessible. Data Centres would also be designated as an essential service under the law, like telecom networks. 
  • Data Centre Incentivisation Scheme (DCIS): A scheme to provide “fiscal and non-fiscal” incentives to data centres would be formulated, indicating tax breaks for the sector. 
  • Land Parcels: States and Union Territories would be encouraged to provide land parcels for Data Centre Parks, along with municipal supplies such as water, electricity, etc. 
  • Data Centre Economic Zone Scheme (DCEZ): The policy also proposed to set up four data centre economic zones, akin to Special Economic Zones, with a non-IT and IT infrastructure, connectivity, power and regulatory environment. 

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