Data Centres – Invest Telangana

DEPARTMENT OF INDUSTRIES AND COMMERCE,
GOVERNMENT OF TELANGANA

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Data Centers

$ 0 Bn

Data Center Industry's market capitalization by 2022

0 Mn

No of mobile phone (wireless) data users in the country

0 %

Annual Growth rate of wireless data in the country

0 Cr

Budget Allocated for setting up Data Centers and IT Parks

Jayesh Ranjan, IAS
Principal Secretary,
Industries & Commerce

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Industry outlook, Opportunity in Telangana

India

With onset data localization law in India, there has been a huge increase in the demand for Data Centers located within India. The data center industry in India is expected to reach 1.5 Billion USD within 2022 growing at a CAGR of 11.4% according to a study published by MarketsandMarkets of the exports.

Currently, India’s 578 mn mobile phone (wireless) data users is the world’s second largest digital population group that has been growing annually at 20% since 2014. This has led to an unprecedented growth of data consumption and generation, creating the need for data centres to store and maintain this huge resource. Although data storage needs are currently being met by data centres across the globe, legislation on personal data privacy rights is considered to be the tipping point for the growth of the data centre industry in India. To cater to the increased demand Finance Minister Nirmala Sitharaman, in her recent budget announcement, proposed to allocate Rs 8,000 crore to set up data centres and IT parks, over the next five years.

Telangana

Telangana is the first state in India to launch a Data Center Policy.

Major Investments

Government Support

Power & Energy

Infrastructure

Manufacturing

Fisical Incentives

Promoting Startups/SMEs:

Non-Fisical Incentives

Given the power heavy investment nature of data centres, and the power deficiency situation that exists across the country, the Government of Telangana shall establish dual power grid networks to ensure uninterrupted quality supply of electricity
Data Centres shall be permitted to avail renewable energy under open access system from within the state after paying cost component to DISCOMs as fixed by the ERC (subject to maximum of one third of their total power requirements). This limit will be expanded to 100% by 2021.
Power will be provided at subsidies rates.
Given the significant consumption of fuel by backup power sources such as generator sets, the Government shall provide fuel at a price lower than the market rates to eligible players in the Data Centres Campus. Additional details on the same shall be detailed out in the operational guidelines

Data Centres will be identified as a separate infrastructure category, given the sector specific design and construction features, the Government of Telangana shall include Data Centres related infrastructure under the building permission rules.
Government of Telangana shall earmark a land parcel in the city for constructing a Data Centres Campus. [Project in planning stage] This Data Centres Campus, in addition to hosting Government managed data storage facilities, shall cater to companies irrespective of their size and scale.
Large companies interested in procuring Government land in the Data Centres Campus can set up their own facility.
Small and medium companies, which specialize primarily in servers and racks, shall be provided with built up space equipped with basic infrastructure.
Further, every player with presence in the Data Centres Campus shall be provided access to high speed fiber and continuous water supply for heavy duty cooling systems.
Further, given the critical nature of data hosted at the Data Centres Campus and the importance of such a centralized facility, the Government shall, at its own cost, take up the responsibility of providing adequate security in and around the campus.

Government shall also create 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 out of Telangana.

Relevant incentives mentioned in the GO on Incentives for expansion of IT/ITeS shall be applicable for data centre firms. In addition to the IT/ITeS and Innovation Policy, the following incentives shall be provided:

Building Rules: Up to 50% rebate shall be given on building fees as decided by CCITI.
Land: Land shall be provided at a subsidized cost as decided by CCITI and concerned ministers.

Procurement: Additional preference shall be given to Startups/SMEs for procurement of data centre services by the Government. Separate guidelines will be issued for the same.
Subsidy on Lease Rentals: 25% Subsidy on Lease Rentals up to INR 5,00,000 per annum for a period of 3 years will also be provided.
R&D grants: The Government of Telangana will facilitate to provide specific R&D grants to companies in tune of 10% of overall R&D expenses of the company’s Telangana operations or 2% of annual turnover of company’s Telangana operations or INR 5,00,000, whichever is lesser.
Internet Costs: Data Centre Startups shall be provided 25% reimbursement on internet charges up to a maximum of INR 2,50,000 per year for the first three years of operation.
Patent Filing Costs: The cost of filing and processing a patent application will be reimbursed to data centre startups subject to a limit of INR 2,00,000 per Indian patent awarded and INR 10,00,000 for foreign patent awarded.

Given below are the general incentives available to the ICT industry, automatically. The Data Centre firms, by virtue of being IT units, are serving global customers on 24x7x365 basis. Therefore, this industry is classified under “Essential Services” and enjoys the following benefits:

Data Centre firms are exempt from the purview of the Telangana Pollution Control Act, except in respect of IT parks/IT SEZ campuses with built up area over 20,000 sq.mt., special permissions need to be taken from SEIAA under MoEF.
Data Centre firms are exempt from the purview of statutory power cuts.
Data Centre firms are exempt from inspections under the following Acts and the Rules framed thereunder, barring inspections arising out of specific complaints. These units are permitted to file self-certificates, in the prescribed formats.
- The Factories Act, 1948
- The Maternity Benefit Act, 1961.
- The Telangana Shops & Establishments Act, 1988
- The Contract Labour (Regulation & Abolition) Act,1970
- The Payment of Wages Act, 1936
- The Minimum Wages Act, 1948
- The Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959
General permission for three shift operations with women working in the night.
Data Centre Firms are declared as essential service under TS Essential Services Maintenance Act.