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The government has accorded infrastructure status to data centres with more than 5 megawatt (MW) capacity of IT load, according to a recent notification.
This helps data centre companies to get easier access to institutional credit at lower rates, attract foreign investments etc.
"Data Centre is included in the Harmonized Master List of Infrastructure sub-sectors by insertion of a new item in the category of 'Communication'," a notification dated October 11, said.
Data centres that are "housed in a dedicated/centralized building for storage and processing of digital data applications with a minimum capacity of 5 MW of IT load" will be considered eligible for infrastructure status, as per the notification.
Finance Minister Nirmala Sitharaman made an announcement in the budget speech for 2022-23, that data centres will be granted infrastructure status.
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She identified high energy prices among the biggest problems facing the Indian economy in the near futureAccording to an ICRA report, data centres’ capacity expansion in India by both foreign and local firms is expected to add investments of ₹1.05 lakh to ₹1.2 lakh crore over the next five years.
Indian corporates like the Hiranandani Group, Adani Group, and foreign investors including Amazon, EdgeConnex, Microsoft, CapitaLand, Mantra Group have started investing in Indian data centres.
Existing players like CtrlS, Nxtra, STT India are also expanding their capacities.
A CBRE report released in September said India's data centre market has witnessed an investment of $14 billion (₹1.15 lakh crore) in the last five years, and the cumulative funding could cross $20 billion (₹1.64 lakh crore) by 2025 as investors look for assets with stable income.
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