Government to provide infra status to data centres for cheaper finance

In a recent announcement, the government has decided to provide infrastructure status to data centres. This is expected to enable developers to access cheaper finance and make further investments into this segment. 

Several state governments have already reported incentives for firms investing in data centres and have drawn investments from multinational companies (MNCs).

Rachit Mohan, Head, Data Centre Advisory, India, JLL, says, “Data Centres are expected to play a key role in the country’s vision of a $1 trillion digital economy in the next five years. Data centres, like other infrastructure, are capex intensive with an extended payback period. 

The availability of long-term finance at lower rates due to the grant of ‘infrastructure status’ is expected to make the Indian industry more cost-competitive. This will aid in making our country a global hub for DCs. Setting up large DCs with higher capital outlay would be possible. Real estate developers can develop DC parks on the lines of specialised zones due to the availability of long term funds.”

According to the reports, for 2021, the hyperscale computing cloud earnings worldwide stood at $124.7 billion, of which, India accounted for $3.8 billion in revenue. Date centre parks will also generate employment and lead to different information technology. The government’s step will boost the ambition of India to become a major data centre player in the region. The key players expect that around 2,500 MW new DC capacity would be required in the country by 2026.