India Plans Incentives To Accelerate Data Centre Growth With Focus On AI, Smes

(MENAFN- KNN India) New Delhi, Oct 30 (KNN) In light of increasing adoption of cloud computing, artificial intelligence (AI), and machine learning (ML) technologies, the Indian government is considering a new incentive-based policy aimed at fostering the growth of data centres, according to highly placed sources.

The proposed framework will go beyond infrastructure development, focusing instead on computational output and advanced AI capabilities to benefit start-ups, small and medium enterprises (SMEs), and the broader digital economy.

Currently, India lacks a specific incentive-linked policy to promote data centre growth. The most recent support came in the Union Budget for FY23, when the Finance Ministry granted infrastructure status to data centres, opening doors for easier access to financing.

However, the government is now set to revise the Draft Data Centre Policy, first introduced in November 2020, to align with the rapidly evolving technological landscape.

According to sources cited by CNBC-TV18, the government is not keen on offering blanket incentives for merely establishing data centres. Instead, it aims to ensure that benefits are not monopolised by a few large technology or real estate companies.

The focus will shift towards linking incentives with the compute power available for key sectors like start-ups and SMEs, supporting their integration into India's expanding AI ecosystem.

A major area of emphasis in the updated policy will be AI/ML-driven data centres, which require specialised infrastructure outfitted with high-performance GPUs and TPUs.

These facilities, essential for training and deploying AI models, come with high costs and energy demands. The government views these centres as critical to India's AI aspirations, particularly given the surge in multi-lingual data generation across the country.

During the India Mobile Congress, Reliance Jio Infocomm Chairman Akash Ambani urged the government to expedite the policy revision. With Prime Minister Narendra Modi in attendance, Ambani stated,“The scale and speed of multi-lingual data generation in India, which will drive the AI revolution, will grow exponentially. We request the government to fast-track incentives for AI/ML data centres to ensure Indian data stays within Indian borders.”

India's data centre capacity is on track to more than double from 950 MW to 2000-2100 MW by FY27, according to a recent report by ICRA. This expansion will play a pivotal role in supporting the nation's ambitions of becoming a global digital hub, with data centres at the forefront of the AI-driven future.

(KNN Bureau)

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