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Setting up data centres should not be mandatory: Amitabh Kant, Niti Aayog

25-May-2016
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Setting up data centres should not be mandatory: Amitabh Kant, Niti Aayog

The latest IAMAI report highlights the opportunities for India to become a leading player in the global data center market if conducive policy and regulatory frameworks are adopted. The paper highlights key measures to increase innovation and stimulate innovation, in what is widely considered to be one of the fastest growing technology segments today.

Releasing the report, 'Make in India: Conducive Policy & Regulatory Environment to Incentivize Data Center Infrastructure', Amitabh Kant, CEO – Niti Aayog, said, “Decision to set up data center in the country cannot be mandatory and it will not be conducive for the eco-system. For a conducive policy and regulation on data center, we have to work in partnership with industry bodies like IAMAI and the industry.” He further added, “I will initiate a dialogue with departments like IT, Telecom and Energy to create the best possible infrastructure for data centers.”

Dr. Subho Ray, President, IAMAI, commented, “India has the potential to capture a big share in the global data center market, and to fully realise this potential, India needs to address some of the risks and barriers to data center operations in the country today, and create the right incentives for businesses to build effective data center infrastructure.”

The paper calls for the government to facilitate data center operations in India, through clear policies to facilitate trans-border flow of data and tax SOP/incentives to woo foreign players. At the same time, the paper warns against the dangers of forced localisation of data, adding that the same would reduce competitiveness, harm GDP and harm India’s fledgling reputation as an emerging data center hub.

 The key points highlighted in the paper include:

  • Policies which are aimed at facilitation of trans-border data flows could have a number of benefits for Indian organisations including economies of scope, increased ICT trade, access to knowledge, outsourcing of support functions enabled by global supply chains, medical data transfers, international growth opportunities, as well as increased productivity and innovation.
  • In order to realise its potential to become a leader in the global data center market, India needs to address the risks and barriers currently facing the sector including factors such as energy, bandwidth, red tape, sustainability, risk of natural disasters and water resources.
  • In addition, India needs to evolve a policy and regulatory environment manifesting transparent legislation, a rational framework of strong, industry-driven policies as well as no localisation or ownership limitations. If the same is not forthcoming, India will be unable to capitalise on its strengths in ICT, a growing human resource base in the sector and relatively lower operational costs.

Measures including tax incentives and simplified clearance and licensing norms could be important elements of a pro-innovation policy framework, which will prove crucial to attracting investments in data centers.

According to the report, India’s data centre Infrastructure market will grow up to $ 7 billion by 2020. The Indian data centre infrastructure market is valued at $2.2 billion currently, and is poised to be the second largest market for data center infrastructure within the Asia/Pacific region by 2020. 

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