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NASSSCOM’s Recommendations for Data Centre Policy

Blog: NASSCOM Official Blog

Globally, data is being created at an unprecedented pace. Global Datasphere, which is the total amount of data created, stored and replicated is estimated to grow from 33 ZB in 2018, to 175 ZB by 2025.[1] Given this trend, there is a need for building more Data Centres to store data, which in turn can be leveraged to provide a variety of cloud services.

In this background, the Finance Minister in the Budget speech this year proposed bringing out a policy to enable the private sector to build data centre parks in India. In response to this announcement, NASSCOM formed a 10 member Data Centre Policy Taskforce, comprising of senior industry leaders, to propose recommendations that can help promote the growth of Data Centres in India. The taskforce, after deliberations, arrived at specific recommendations, which were submitted to the Ministry of Electronics and Information Technology (MeitY) on 19.05.2020.

A summary of the recommendations is provided below:

  1. Establish pre-provisioned data centre parks with necessary infrastructure to host multiple data centres– Data Centres have unique infrastructural requirements, particularly with respect to power, land and connectivity. Enabling these factors for data centres requires Government intervention such as setting up dedicated data centre parks in the country.
  2. Establish dual power grid networks to ensure uninterrupted supply of electricity. Data centres operate round the clock, and their customer contracts requires them to be functional upto 99.995% of time. Therefore, they need uninterrupted supply of power. Establishing dual power grid supply will ensure that atleast one power source is functional in case other faces a breakdown.
  1. Allow data centres to consume renewable energy procured directly from power producers through the open access system, without any restrictions: Distribution companies (discoms) have placed various restrictions around usage of renewable energy (RE), even if procured directly from the power producer which stand in the way of companies meeting their commitments on usage of RE to the desired proportion. Therefore, we suggested removal of these restrictions.
  1. Allow IP-I companies to share passive infrastructure directly with data centres in order to establish, maintain and operate an extended “private telegraph” (non-public telecommunications services) between two or more data centres in different locations. Currently, it is not permissible under Indian law for unlicensed entities such as cloud service providers (CSPs) to access dark fibre to construct their own private networks and connect their data centres (not for the purposes of providing public telecommunications services). CSPs, therefore, are required to procure all active network services/connectivity from telecommunications services providers (TSPs), which lead to operational challenges and increase overall cost of the business. We therefore suggested that IP1 service providers should be allowed to share this infrastructure directly with CSPs. 
  1. Enable data centre entities to import dual use network equipment for internal use and network infrastructure. Currently, data centres in India are prohibited from importing certain dual use equipment, even if they do not intend to use such equipment for telecom services. These restrictions lead to operational challenges and affect the quality and efficiency of data centres and cloud services. Therefore, we recommend that data centre entities should be allowed to import dual use network equipment for internal use and network infrastructure.
  1. Implement a Dial Before You Dig Policy (DBYDP): Frequent digging of roads due to construction work and lack of coordination between multiple agencies involved in construction, poses a continuous threat of cable breaks or ‘’hits’’ to data centre operators. Implementing a Dial Before You Dig Policy (DBYPB) would allow authorities responsible for carrying out construction work to access information about the underlying network infrastructure before digging and minimize cable breaks. 
  1. Create common service ducts and utility corridors in all new cities as well as state/national highway road projects: Common service ducts and utility corridors along with efficient and cost-effective mechanisms for infrastructure companies (including data centre companies) to gain access to them will bring down maintenance and repair costs for the companies. 
  1. Recognise data centres as a separate category in the National Building Code: Currently, the building codes in India do not recognise “Data Centre” as a separate category. Therefore, the building norms of office buildings are applied to data centres. These norms are not suitable for the needs of data centres as they reduce the spatial efficiency and unnecessarily increase the operations cost. 
  1. Introduce deemed approval system for statutory clearances: Presently around 30 different approvals are required from central and state governments, before a data centre can start operations. To prevent delay in these clearances, a deemed approval system with specified timelines should be introduced both at the Central and State government levels. 
  1. Provide ‘infrastructure’ status to data centres: Infrastructure status to data centres will enable the industry to raise money from insurance companies, pension funds, and international lenders with a longer tenure and on easier terms. This would also give data centres access to cheaper foreign currency funding through the external commercial borrowing route. 
  1. Notify data centres as essential services under ‘The Essential Services Maintenance Act, 1968’: In times of calamity and other crisis, the status of essential services could provide the basis for State Governments to consider providing necessary support to data centres on a preferential basis. 
  1. Create a joint Centre-State implementation mechanism to implement the above recommendations: While some of the above recommendations are to be implemented by the State Governments, others fall under the ambit of the Central Government. Given that all recommendations are important to promote data centres, there is a need for creating a joint Centre-State implementation mechanism to ensure that these recommendations are implemented.

[1] Reinsel et al., ‘The Digitization of the World: From Edge to Core’, IDC White Paper, November 2018; available at:

The post NASSSCOM’s Recommendations for Data Centre Policy appeared first on NASSCOM Community |The Official Community of Indian IT Industry.

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