India is moving forward in digital transformation and in a rapid pace. The demand for powerful data infrastructure is high but a structured incentive policy to boost data centre development is absent. Data centres gained infrastructure status in the Union Budget FY23 and it was a step toward reducing financial as well as operational burdens. The true requirement was to have a well-targeted and incentive-driven policy to expand data capacity as well as prioritize areas of high impact such as artificial intelligence (AI), startups and SMEs.
The government is now considering a revamp of the 2020 Draft Data Centre Policy and it is basically to encourage data centres that offer compute power for AI and ML needs. The recalibrated focus is a tech upgrade and it is a potential game-changer for sectors which are hungry for affordable and scalable digital solutions. Advanced AI data centres are essential for training and deploying complex AI models. They are expensive and energy-intensive as well as require considerable investment.
A critical point was raised by Reliance Jio’s Akash Ambani at the recent India Mobile Congress adds perspective. India is generating multilingual data at unprecedented rates and setting the stage for an AI-driven data revolution. Ambani advocated for comprehensive incentives for data centres specializing in AI.
However, the incentives must be strategic. The government appears cautious about simply rewarding the establishment of data centres. This basically risks benefiting just a handful of large players.
The data capacity currently in the country is around 950 MW and it is expected to double to more than 2000 MW by FY27. Policies should ensure that the infrastructure benefits sectors driving real innovation. Data centres can become powerful engines of economic growth and allow startups, SMEs as well as AI ventures to thrive as well as contribute to India’s digital future.
