Surge in data centre building predicted as India changes the rules

Surge in data centre building predicted as India changes the rules

India has been a target market for data centre builders and investors for some while. Now, however, Indian plans to classify data centres as infrastructure could speed up the data centre development process.

The Indian government plans to classify data centres as infrastructure assets from 1 April. This will permit access to cheaper and long-term institutional funds. This in turn means it will be easier for the industry to raise funds via investments or loans.

This plan was part of the budget speech by Nirmala Sitharaman, India’s finance minister, whose 5G announcement we mentioned yesterday. She said, “Data centres and energy storage systems including dense charging infrastructure and grid-scale battery systems will be included in the harmonized list of infrastructure.”

This decision isn’t just good for the buildout of digital infrastructure; it is hoped it will also boost investment in clean energy storage.

Specialist website Data Centre Dynamics points out that the change comes as the government tries both to digitise rural India and shift user data from foreign data centres into local facilities. In any case, with 5G on the horizon, already fast-growing demand for data centre services is not going to slow down any time soon.

Whatever the motivation for this decision, the data centre industry has welcomed the move. There are already a number of companies building data centres in India, but we can no doubt expect a surge in data centre capacity in the coming months.

And as Bloomberg points out, access to cheap, long-term credit won’t just benefit foreign investors. It will be a big boost for local companies like Bharti Airtel, the Adani Group and Reliance Industries.


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