Market Trends of India Data Center Industry
Government Support in the Form of Tax Incentives for Development of Data Centers is Expected to Drive the Market Growth
- The Government of India and various state governments are revising their data center policies to support the infrastructural growth of data centers in India through tax subsidies. Under a national policy framework for data centers, the IT ministry intends to provide up to INR 15,000 crore (USD 1.83 Million) as incentives. The government plans to invest up to Rs 3 lakh crore (USD 36.5 Million) in the data center ecosystem, over the next five years, as per the policy.
- The Government of Maharashtra announced the GST refund for a maximum period of 10 years for the companies that participate in developing integrated facilities. Similarly, the Andhra Pradesh government announced providing 50% reimbursement of SGST on purchasing raw materials and equipment for three years from the approval date of the project.
- Tamil Nadu government announced a data center policy that allows the data centers to avail of an Electricity TAX waiver. For five years following the start of commercial operation, there is a 100% electricity tax subsidy on power obtained from the Tamil Nadu Generation and Distribution Corporation Ltd. or generated and consumed using captive sources.
- The Odisha government announced a data center policy that offers a 100% reimbursement of net SGST. Net SGST paid in will be fully reimbursed to eligible units, relying on its exports of goods and services for funding limited to 100% of fixed capital investment for a maximum of seven years.
- In June 2022, the Haryana cabinet approved a data center policy to make Haryana a popular location for constructing these facilities and assist the state in becoming a hub for global data centers. The Haryana government would categorize the data center sector as an energy-intensive and infrastructure industry. The government would deem data centers essential by the Haryana Essential Services Maintenance Act of 1974. This policy includes various tax incentives, such as reimbursement of SGST and a land tax rebate.
- As per NASSCOM, the Indian data center market would witness cumulative investments of USD 25 billion during 2019-2025. India’s data center market investment is expected to reach USD 4.8 billion in 2025. Investment increase is expected from private equity players, real estate developers, and end occupiers.
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Servers IT Infrastructure Type Segment is Expected to Holds Significant Market Share
- In India's data center market, various IT infrastructures are deployed to support server operations. Rack servers are the most common type of servers used in data centers. These servers are mounted in standard racks, which provide easy installation and maintenance.
- Virtualized servers use virtualization technology to run multiple virtual machines on a single physical server. This approach helps maximize resource utilization and improve efficiency in data centers.
- Storage servers are specialized servers dedicated to storing and managing data. They provide high-capacity storage solutions for data-intensive applications and backup purposes.
- Mainframe systems are high-performance servers designed for heavy workloads and large-scale data processing. They are commonly used in enterprise-level data centers.
- With the growth of data-intensive technologies, cloud computing, and digital services, organizations are generating and processing larger volumes of data. Data centers need to scale their server infrastructure to accommodate these increasing workloads. This may involve adding more servers to existing data centers or constructing new data centers altogether.
- The increasing number of data centers directly relates to the demand for server IT infrastructure. As the number of data centers grows, there is a corresponding need for more server infrastructure to support the expanding computing requirements. According to Cloudscene, as of January 2022, 138 data centers were in India.
