In a decisive move to bolster India’s digital infrastructure, the Ministry of Electronics and Information Technology (MeitY) has reignited consultations on the long-pending National Data Centre Policy. Originally drafted in 2020 but never implemented, the policy is now being re-evaluated to align with the explosive growth of artificial intelligence, cloud computing, and data localization needs. The renewed push aims to streamline approvals, incentivize investments, and decentralize data centre capacity across the country.
Here’s a comprehensive breakdown of the latest developments and what they mean for India’s tech future.
Key developments from the latest consultation
1. MeitY held a limited stakeholder consultation in New Delhi last week, inviting industry leaders to submit recommendations by mid-August
2. The ministry is revisiting the original draft to reflect sectoral changes over the past five years, especially the rise of AI and edge computing
3. The policy’s core goals include single-window clearances, infrastructure status for large data centres, and the creation of Data Centre Economic Zones (DCEZs)
4. The government is considering adopting successful elements from state-level policies in Maharashtra, Tamil Nadu, Karnataka, and others
5. The first AI-powered data centre park in Naya Raipur, Chhattisgarh, was cited as a model for future decentralization
Why the reboot matters now
India’s data centre industry is at an inflection point. With over 153 operational centres and capacity projected to grow 77 percent by 2027, the sector is critical to supporting the country’s digital economy. However, nearly 80 percent of current capacity is concentrated in Mumbai, Chennai, and Delhi NCR. This uneven distribution poses risks to resilience, scalability, and regional inclusion.
The revised policy seeks to address these gaps by:
- Encouraging edge data centres in Tier 2 and Tier 3 cities
- Coordinating with state governments to manage rising power demands
- Promoting domestic manufacturing of IT hardware and components
- Offering fiscal and non-fiscal incentives to attract global hyperscalers and cloud providers
What’s on the table: Proposed features of the updated policy
- Four dedicated Data Centre Economic Zones (DCEZs) to host hyperscalers, cloud firms, R&D units, and allied industries
- Infrastructure status for data centres with 5 MW or higher capacity, easing access to financing
- Incentives for renewable energy adoption and green building norms
- Integration of state-level best practices, such as Tamil Nadu’s relaxed building codes and Karnataka’s uninterrupted power guarantees
- A single-window clearance system to reduce bureaucratic delays
Industry response and expectations
Industry executives welcomed the renewed dialogue but emphasized the need for clarity, speed, and uniformity. Many operators have voiced concerns over fragmented state regulations and long approval timelines—some data centres reportedly take up to four years to build due to red tape.
There’s also growing interest in aligning the national policy with global standards. While MeitY’s certification scheme is under review, stakeholders are pushing for voluntary, tiered compliance frameworks that recognize existing international certifications like Uptime and TIA942.
The road ahead: What to watch for
- Final recommendations from stakeholders are expected by mid-August
- MeitY may announce a revised draft policy later this year, incorporating feedback from industry and state governments
- The success of the policy will hinge on its execution—especially the rollout of DCEZs and the simplification of approval processes
- With AI, 5G, and IoT driving demand, India’s data centre footprint could triple by 2030, attracting over USD 25 billion in investments
Conclusion
MeitY’s revived push for a national data centre policy marks a pivotal moment in India’s digital journey. By addressing regulatory bottlenecks and incentivizing infrastructure expansion, the government is laying the groundwork for a more resilient, inclusive, and globally competitive data ecosystem. If executed well, this policy could transform India from a digital consumer to a digital infrastructure powerhouse.
Sources: The Economic Times, MSN India, Profile IT Solutions, Colliers India, Digital India Portal
