Streamline approval process for setting up data centres in India: CtrlS Founder

Indian data centre operator CtrlS said that the government should smoothen the approval modalities for setting up new data centres and data centre parks locally, and institutionalise single-window clearance process.

“Government should streamline necessary approvals for establishment of data centers or data center parks nationwide, and institutionalise procedure for providing a single-window clearance, ensuring that states and Union Territories adhere to time-bound processes and offer uninterrupted and cost-effective electricity, and robust connectivity,” Sridhar Pinnapureddy, Founder of CtrlS Datacenters told ETTelecom.

Hyderabad-based CtrlS is one of the data centre pioneers with footprints in Noida, Bengaluru and Mumbai, employing nearly 2,000 individuals.

The flexible approach, according to him, would ensure reliable access to power sources and essential infrastructure, and enable in fortifying the foundation for sustained and efficient data center operations.

In order to boost India’s data center expansion, the Centre formulated a data center policy, enabling data center operations under the Essential Services Maintenance Act (ESMA) 1968.

In 2020, the Ministry of Electronics and IT (MeitY) proposed to set-up at least four Data Centre Economic Zones (DCEZ) in the country to essentially create an ecosystem of hyperscale data centres, cloud service providers, IT companies, and other allied industries.

Touted as one of Asia’s largest hyperscale data center providers, CtrlS has an ambitious $2 billion investment plan for the next six years with a focus on increasing cloud workloads and artificial intelligence (AI).

Pinnapureddy said that despite the growth observed in the country’s data center sector, it faces notable hindrances to its expansion. “These challenges include deficiencies in infrastructure, intricate clearance processes, higher power costs, limited submarine cable network connectivity restricted to certain states, and the high costs associated with both capital and operational expenditures.”

However, in an ambition to attract foreign direct investment (FDI) in the data centre segment, the government aims to improve international connectivity and bandwidth cost in line with the National Digital Communications Policy, unveiled in 2018.

The data center market, according to CtrlS, has been experiencing significant growth driven by increased demand for cloud services, digital transformation, and the proliferation of data-intensive technologies such as artificial intelligence (AI), Internet of Things (IoT) and 5G.

Early this year, Swedish Ericsson, in its study, said that India is expected to lead global data consumption, reaching 62GB per user per month by 2028, surpassing a few developed markets such as the US, China and South Korea.

“The driving forces behind the expansion in the data center industry include the digitalisation of industries, a growing population of internet users, government initiatives of data localisation, and India’s attractiveness as a hub for outsourcing,” Pinnapureddy said.

Industry estimates suggest that data center business in India would have a consistent annual expansion, with an expected compound annual growth rate (CAGR) of 5.84%, propelling the market size to an estimated US$9.27 billion by 2027.

The data centre company plans to augment its capacity by an additional 350 MW, and said that it would set up a solar park near Mumbai, to reaffirm its commitment on sustainably and eliminating carbon footprint, as a part of expansion plan.