Hyderabad: Hyderabad has emerged as a leading global software development centre, thanks to the State government’s comprehensive ICT (Information and Communications Technology) policy, brought out in 2016. Apart from being home to a large pool of talented manpower, high quality and cost-effective infrastructure, it is also centrally located in India and therefore well connected and seismologically safe. All these advantages backed by a dedicated Data Centres Policy make Hyderabad one of the most attractive investment destinations for setting up data centres.
Prime Minister Narendra Modi in 2015 stressed on the need for data localisation, along with policy framework and rules to govern that, with the increasing digitalisation the nation is seeing. Quickly responding to the country’s expectation, Telangana IT Minister KT Rama Rao worked on a comprehensive ICT policy that included crucial aspects such as Data Centres Policy and Cyber Security Policy that aimed towards data storage, protection and governance.
Telangana soon rolled out a dedicated Data Centres Policy in 2016 to spur companies, which offer data storage as a service and those who themselves have a huge in-house requirement of data storage to look at Telangana and Hyderabad as their preferred choice. The locational and value advantages that Hyderabad offer make it the go-to destination for data centres. The policy has set a clear roadmap on how the State wishes to position itself with respect to data centres and allied activities.
The data centres industry sprouted in the State around 2008 when CtrlS was founded in Hyderabad. Today CtrlS owns India’s first Tier 4 data centre and has become Asia’s largest Tier 4 data centre with operations across top cities of India. National Payments Corporation of India, an umbrella organisation for operating retail payments and settlement systems, is also setting up a data centre in Hyderabad.
Real estate consultancy firm JLL projects that Hyderabad data centre capacity is expected to grow from 32 MW in the first half of 2020 to 130 MW ending 2025. The city is likely to attract hyper scalers due to various incentives provided for data centres and the presence of global in-house centres.
Policy framework
Telangana has announced significant initiatives in the ICT policy, with a focus on areas such as internet of things, cybersecurity and data analytics. Most of these areas are data-intensive and data centres are an integral requirement of these firms. Understanding that these factors have the ability to spur growth in data centres and are critical for the sustenance of these areas, Telangana strives to cater to all these requirements in-house.
The government considers data centre investments will aid in developing a comprehensive eco-system. In addition, the Telangana government, through its initiatives in open data, data-smart governance, eOffice initiatives will also act as a major client for these centres. As part of the policy, to complete the IT/ITeS ecosystem, the Government of Telangana intends to earmark a land parcel in the city for constructing a Data Centres Campus, which in addition to hosting Government managed data storage facilities, will cater to companies irrespective of their size and scale.
Additionally, to identify Data Centres as a separate infrastructure category, given the sector-specific design and construction features, the Government of Telangana envisaged inclusion of data centres related to infrastructure under the building permission rules.
Given the power heavy investment nature of data centres, they are permitted to avail renewable energy under open access system from within the State after paying cost component to Discoms as fixed by the Energy Regulatory Commission (subject to a maximum of one-third of their total power requirements).
The Government through its policy has offered attractive, tailor-made packages for companies willing to manufacture data centre stacks in the State. In addition to providing financial incentives and subsidies, the Government shall also be among the primary consumers and procure hardware for the State Data Centre from companies manufacturing components in Telangana
