On July 24, Reliance Industries announced that it has partnered with Brookfield Infrastructure and Digital Realty (a real estate investment company that invests in data centers) to develop data centers in Mumbai and Chennai. This joint venture will be called “Digital Connexion: A Brookfield, Jio and Digital Realty Company” and Reliance Industries will have a 33.33% (one-third) stake in it.
The venture’s first 20 megawatts greenfield data center in Chennai is expected to be completed by the end of 2023. The partnered companies have also acquired 2.15 acres of land in Mumbai to build a 40 MW data center.
What is a data center?
Data centers are facilities that centralize an organization’s IT operations and equipment to store, process, and disseminate data and applications. They support activities such as the processing of e-commerce transactions and the functioning of artificial intelligence (AI) solutions.
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Why it matters:
Reliance Industries said that there is an “increased emphasis on localization of personal data within the country,” which will significantly increase the data center and compute capacity requirements of the country. It believes that given these conditions, this joint venture will be well-positioned to serve local and global enterprises.
This “emphasis on data localization” might come from the Data Protection Bill, which is expected to be tabled in the Parliament during the monsoon session. The 2022 iteration of the bill said that the personal data of Indians can be transferred only to the countries notified by the government. However, till the bill is tabled it is unclear whether it will continue to emphasize data localization or not. It is rumored that the 2023 iteration of the bill might do away with data localization requirements and allow transfers of data to all countries except those on a blacklist.
How government policy has helped the creation of data centers:
“We would like to thank the Indian government for granting infrastructure status to data centers and for creating a favorable ecosystem for their development and operations,” said Kiran Thomas, the CEO of Jio Platforms Limited in Reliance’s announcement of the joint venture. This infrastructure status that he mentions, was granted as a part of the 2022 budget, it helps data center companies get institutional credit at lower rates and attract foreign investments, according to The Economic Times.
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