By Rajesh Kaushal, Vice President, Delta Electronics India
Introduction
In the dynamic landscape of India’s digital evolution, data centers play a pivotal, yet often
unnoticed, role as the silent powerhouses that store and process the lifeblood of our
increasingly interconnected world. As Internet penetration, cloud adoption, and the Internet of Things (IoT) explode, the demand for data storage and processing capacity is skyrocketing.
This surge presents both unprecedented opportunities and significant challenges for the
industry, with the upcoming Union Budget 2024 poised to unlock its full potential.
Delta Electronics India, a distinguished provider of data center solutions, outlines its key
expectations from the budget, elucidating essential steps to empower the industry and fuel
India’s digital transformation journey.
Infrastructure status: A Foundation for growth
Granting data centres infrastructure status would be a game-changer, unlocking a myriad of benefits. Lowering Goods and Services Tax (GST) on capital goods, land, and construction would significantly alleviate the cost burden of setting up and operating data centers. Access to infrastructure loans at concessional rates would enhance financial viability, making investments more feasible and attracting new players to the industry. Furthermore, this move would attract foreign investors, leading to increased capital inflows and fostering cutting-edge technological advancements.
Green credentials: Powering progress sustainably
Given their inherently energy-intensive nature, data centers must adopt sustainable practices. The budget should incentivise the adoption of renewable energy sources like solar and wind power. Financial incentives such as subsidies and tax breaks for setting up renewable energy infrastructure within data centers would encourage green practices. Additionally, establishing a certification program for green data centers, offering benefits like expedited approvals and reduced regulations, would further incentivise and promote sustainable operations.
Building a skilled workforce: Equipping the future
The data center industry requires a skilled workforce proficient in areas like data center
operations, network management, and cybersecurity. The budget should address this crucial need by allocating funds for dedicated training programs, creating a readily available pool of qualified personnel, and bridging the talent gap. Encouraging students to pursue careers in Science, Technology, Engineering, and Mathematics (STEM) is vital for creating a future-ready workforce for the data center industry.
Data security: Building trust in the digital age
As data security and privacy become paramount concerns in the digital age, the budget should focus on robust data security frameworks. Supporting the development and implementation of such frameworks is crucial to ensuring the safety and integrity of data stored in data centers. Furthermore, establishing clear and consistent regulations will foster a predictable business environment for data center operators, ultimately enhancing user trust.
Make in India for data centres: Empowering domestic potential
The government’s Make in India initiative holds immense potential for the data center industry. The budget can further this vision by incentivising local manufacturing. Offering incentives to manufacturers of data center equipment would encourage domestic production, reducing reliance on imports and creating job opportunities. Simplifying import-export regulations by streamlining customs procedures would facilitate the smooth flow of critical components for data center construction, enhancing domestic manufacturing competitiveness.
Regional data hub: Leveraging India’s strategic position
Recognising India’s potential to become a regional data hub, the budget can unlock this
prospect by facilitating the development of strategic data center clusters in key locations. Such an initiative would attract investments and create economies of scale for data center operators. Investing in upgrading internet connectivity and submarine cable capacity would further enhance regional data accessibility, positioning India as a leader in the digital landscape within Southeast Asia.
Conclusion: A collaborative path to progress
Delta Electronics India firmly believes that by addressing these expectations, the Union Budget 2024 can create fertile ground for the Indian data center industry to flourish. Through collaborative efforts between the government, industry leaders, and stakeholders, we can build a robust, sustainable, and secure data center ecosystem that empowers India’s digital transformation and secures its position as a leading player in the global digital economy. This budget represents a critical opportunity to shape the future of the data center industry, and by prioritising these key expectations, we can unlock its immense potential to power a brighter digital future for India.