Data Center Policies in India Statewise & Role of OCP

By aarvee 2025-03-29 00:00:00 +0000

Contents

Comprehensive Report: Data Center Policies in India vs. Global Standards & Role of Open Compute Project (OCP)

1. Executive Summary

India’s data center industry is projected to reach $10B+ by 2027, driven by state-specific policies, digital growth, and localization laws. This report provides:

  • Granular details of each state’s DC policy (tax breaks, power subsidies, land incentives).
  • Global benchmarking against the U.S., EU, Singapore, and China.
  • Role of Open Compute Project (OCP) in reducing costs and improving sustainability.
  • Strategic recommendations for policymakers and investors.

2. Detailed Statewise Data Center Policies in India

A. Maharashtra

Policy Name: Maharashtra Data Center Policy 2021
Key Incentives:

  • Capital Subsidy: 25% on capex (max ₹50Cr per project).
  • Power Tariff: ₹3/kWh for 10 years + 50% waiver on electricity duty.
  • Land: Discounts in Navi Mumbai, Pune, Nagpur IT zones.
  • Stamp Duty: 100% exemption.
  • Additional Benefits:
    • Single-window clearance via MahaIT.
    • Hyperscale DCs (>15MW) get priority power connections.

Challenges: High land costs in Mumbai.

B. Tamil Nadu

Policy Name: Tamil Nadu Data Center Policy 2021
Key Incentives:

  • Power: 100% exemption on electricity tax + 20% subsidy on solar power.
  • Land: 50% subsidy in Chennai, Coimbatore, Hosur (max 20 acres).
  • Fiscal Benefits:
    • 100% SGST reimbursement for 5 years.
    • ₹5Cr subsidy for fiber connectivity.
  • Fast Approvals: 30-day clearance for DC projects.

Challenges: Water scarcity for cooling in Chennai.

C. Telangana

Policy Name: Telangana Data Center Policy 2020
Key Incentives:

  • Power: 24/7 supply + 25% subsidy on renewable energy projects.
  • Land: Allocated in Hyderabad IT Corridor at 50% market rate.
  • Tax Benefits:
    • 100% stamp duty waiver.
    • ₹10Cr subsidy for R&D in AI/ML-linked DCs.
  • Ease of Business: India’s first State Data Center Authority.

Challenges: Limited submarine cable access vs. Mumbai/Chennai.

D. Uttar Pradesh

Policy Name: UP Data Center Policy 2021
Key Incentives:

  • Capital Subsidy: 7% of investment (max ₹50Cr).
  • Stamp Duty: 100% waiver in Noida, Greater Noida, Lucknow.
  • Power: ₹1/kWh discount for 10 years.
  • Infrastructure: Dedicated DC parks with pre-approved clearances.

Challenges: Lower fiber connectivity than Mumbai/Hyderabad.

E. Karnataka

Policy Name: Karnataka Data Center Policy 2022
Key Incentives:

  • Green Energy: 30% subsidy for DCs using solar/wind.
  • Land: 25% discount in Bengaluru, Mysuru, Mangaluru.
  • R&D Support: ₹20Cr grants for AI/edge computing DCs.

Challenges: Land scarcity in Bengaluru.

F. West Bengal

Policy Name: West Bengal Electronics Policy 2022 (Includes DCs)
Key Incentives:

  • Capital Subsidy: 30% on fixed assets (max ₹20Cr).
  • SGST Reimbursement: 100% for 5 years.
  • Land: Subsidized in Kolkata New Town.

Challenges: Lower investor interest due to political risks.

G. Gujarat

Policy Name: Gujarat Industrial Policy 2020 (DCs under IT/ITES)
Key Incentives:

  • Power: ₹0.5/kWh discount for 5 years.
  • Land: 25% subsidy in GIFT City, Gandhinagar.

Challenges: No dedicated DC policy.

H. Other States

State Key Incentives Challenges
Odisha 15% capex subsidy Low fiber infra
Rajasthan Land at ₹1Cr/acre Water scarcity
Punjab 10% employment subsidy Low demand

3. Global Comparison: India vs. U.S., EU, Singapore, China

A. Incentives & Subsidies

India

  • Tax Breaks: 10-25% capex subsidy
  • Power Cost: $0.06-$0.09/kWh
  • Land Ease: Moderate delays

U.S

  • Tax Breaks: 15-year tax holidays
  • Power Cost: $0.04-$0.06/kWh
  • Land Ease: Fast approvals

EU

  • Tax Breaks: VAT reductions
  • Power Cost: $0.20-$0.30/kWh
  • Land Ease: Strict green checks

Singapore

  • Tax Breaks: No import duties
  • Power Cost: $0.15-$0.20/kWh
  • Land Ease: Limited land

Verdict: India is cost-competitive but lacks long-term tax benefits.

B. Sustainability

  • India: No carbon tax, limited renewables.
  • EU: 100% green energy by 2030.
  • Singapore: Banned new DCs until 2022 for energy conservation.

Gap: India must link incentives to renewable usage.

4. Open Compute Project (OCP): Boosting India’s DC Growth

A. What is OCP?

  • Open-source hardware for servers, storage, and networking.
  • Founded by Meta (Facebook) to cut costs and improve efficiency. Read more…

B. Benefits for India

  1. Cost Reduction (30-50% lower vs. OEMs).
  2. Energy Efficiency (PUE under 1.2 with liquid cooling).
  3. Local Manufacturing (Foxconn, Wistron, VVDN, Excloud can build OCP gear in India).

C. Global OCP Adoption

US

  • OCP Adoption: High (Meta, Google, Microsoft)
  • Impact: ~40% cost savings in hyperscale DCs.

EU

  • OCP Adoption: Growing (Schneider Electric, Deutsche Telekom)
  • Impact: Lower carbon footprint via OCP cooling.

China

  • OCP Adoption: Limited (Alibaba/Baidu use custom designs)
  • Impact: Great Wall, Inspur make OCP-like hardware.

Singapore

  • OCP Adoption: Moderate (ST Telemedia uses OCP)
  • Impact: Helps meet strict energy laws

India

  • OCP Adoption: Emerging Yotta, Excloud
  • Impact: Could cut costs by 30%+ if scaled.

D. Challenges in India

  • Low awareness of OCP benefits.
  • No local OCP-certified suppliers.

E. Recommendations

  1. Policy Support: Include OCP in state DC policies.
  2. PLI Scheme: Subsidize OCP hardware manufacturing.
  3. Skill Development: IITs/NITs to offer OCP courses.

5. Case Study: OCP in Indian Data Centers

Open Compute Project (OCP) in India is gaining traction as the country continues to expand its data center infrastructure and embrace open-source hardware and software solutions. The OCP, initiated by Facebook (now Meta) in 2011, aims to revolutionize data center design by promoting open standards, collaboration, and efficiency.

Read More…

6. Future Outlook & Recommendations

Strategic Actions for India:

  1. Align state policies with global standards (longer tax breaks, green mandates).
  2. Accelerate OCP adoption via hyperscale partnerships.
  3. Improve power infrastructure (renewable integration).

Growth Projections:

  • India to become 2nd-largest APAC DC market by 2030.
  • Mumbai, Chennai, Hyderabad = Key hubs competing with Singapore.

7. Conclusion

  • India’s DC policies are improving but need longer-term incentives and sustainability focus.
  • OCP can be a game-changer for cost and energy efficiency.
  • Next steps: Government-industry collaboration to adopt global best practices.

Appendices