The Indian government will classify data centers as infrastructure assets from April 1.
The move will make it easier for the industry to raise funds, via investments or loans, by providing access to cheaper and long-term institutional funds.
“Data centers and energy storage systems including dense charging infrastructure and grid-scale battery systems will be included in the harmonized list of infrastructure,” Nirmala Sitharaman, India’s finance minister, said as part of the annual budget speech in Parliament.
“This will facilitate credit availability for digital infrastructure and clean energy storage.”
The policy shift, which was widely expected, has been welcomed by the data center industry.
"A step in the right direction for the booming Indian data center industry. This will ensure better access to capital borrowings at a reduced rate since banks have relaxation in the maintenance of capital adequacy for Infra lending," Sunil Gupta, the cofounder and CEO of local hyperscale builder Yotta, said on LinkedIn. "A long-standing demand of the industry is finally fulfilled."
The change comes as the government tries both to digitize rural India and shift user data from foreign data centers into local facilities under the Personal Data Protection Bill.
The two efforts, along with the infrastructure change, are expected to lead to a surge in data center capacity across the country. Radha Dhir, JLL's India head, told Bloomberg that she expected capacity to double from 499MW in the first half of 2021 to 1,008MW next year.
NTT, Princeton Digital Group, Iron Mountain, EdgeConneX, and Hiranandani Group are among a number of companies building in the country, either by themselves or in partnership with local businesses.
AWS has a three-availability zone cloud region in Mumbai that opened in 2016; in 2020 the company announced plans to develop a new region in Hyderabad expected to launch in mid-2022.
Microsoft has three Azure regions in India in Pune, Chennai, and Mumbai and a partnership with Reliance Jio to build data centers across India.
It is also thought to be buying land in Hyderabad for another site.
