To make India a hub for the world’s growing data traffic, the Indian government is promoting new policies that encourage investment in data centres. In its budget for 2022, the government announced several initiatives aimed at making India a data centre hub.
India being a key market in the global data centre landscape is further strengthened with the infrastructure status. The installed capacity of India’s data centres is expected to almost double to 1074 MW by 2023, while Chennai is on course to become the second-largest data hub in the country after Mumbai.
“With multiple submarine cable landing stations, surplus power, and close proximity to key Asian hubs, Chennai is emerging as a top destination for data centres. With the four undersea landing sites and a few more undersea cables which are slated to land at Chennai in the next three years, Chennai will have a very good interconnection with other countries in Asia, Europe and US. Chennai also has a good intracity network connecting the CLS with data centres,” said Manoj Paul, Managing Director, Equinix India.
He further pointed out that the city is also well connected to the national fiber backbone of multiple carriers connecting the city to other metros within the country and thus has a sound optic fiber network access. International travel to the region is easy since it is geographically connected to Southeast Asia. Many IT companies and financial institutes have their technology development centres in Chennai, providing a wealth of IT resources in the city. The cost of living in Chennai is not as high as a few other cities in India. Many companies also choose Chennai as their disaster recovery location. This has led Chennai’s Siruseri to become a data centre and cloud hotspot.
Investment in Chennai
With the geography and policies being conducive in Chennai, Equinix has recently made an investment of over US$9 million to acquire a parcel of land in Chennai on a long-term leasehold basis as part of its expansion and growth strategy in India. The parcel of land is located in the State Industries Promotion Corporation of Tamil Nadu Ltd (SIPCOT) IT Park, providing a total space of more than 5.5 acres.
It is strategically located in the Siruseri area, which is known as the IT Corridor of Chennai, with large and upcoming IT parks and well-established telecom networks.
“Acquiring the land parcel in Chennai on a long-term leasehold basis reinforces Equinix’s commitment to providing the level of interconnection and excellence customers expect to accelerate their digital businesses,” added Paul.
Apart from the internet and space advantages, the state government policy has also been a driving force in attracting investors to the city. In November last year, Tamil Nadu introduced a data centre policy to encourage more investment in data centres to support Chennai’s rising reputation as a top destination for data centre operators and investors.
This has been beneficial as it provides single-window clearances that streamline approval processes and distinct building requirements and concessions considering the specific needs of the data centres. Allowing stacking of generators and transformers as a part of the policy in Chennai is the first in India. These initiatives have significantly improved the ease of doing business in the city.
“With 5G on the horizon, a fast-growing digital economy, enterprise migration to the cloud, and local data storage regulations, India is seeing strong demand for reliable data centre solutions. There will be opportunities for job creation across business functions as a result of accelerated growth and continued investment from large players. There would also be a requirement for network managers and product managers, systems engineers and skilled employees to manage the equipment. This would open up employment opportunities from the initial stage of construction till the regular data centre management on a day to day basis. As India’s bandwidth requirements increase, we may see more companies invest in landing stations and even see subsea cables leading to data centres,” concluded Paul.
In September last year, Equinix acquired the India operations of GPX Global Systems for US$161 million. The India operations of GPX include a fibre-connected campus in Mumbai with two data centres, Equinix said in a statement. This move will help Equinix in India to unlock opportunities for Indian businesses expanding internationally and for multinational corporations pursuing growth and innovation in the Indian market.