Govt pins hope on big ticket investments in data centres

© Provided by The Indian Express

To meet its investment target of Rs 17 lakh crore during the Global Investors Summit, scheduled to take place next month, the Uttar Pradesh government is banking on the data centre and electronic manufacturing sector.

As the government increased its investment target from Rs 10 lakh crore to Rs 17 lakh crore, it revised its investment target for the IT and electronics sector to Rs 1.6 lakh crore – the highest among the 32 big and small sectors identified for targeted investment. The sector with the second biggest investment target of Rs 1.2 lakh crore is medium and small-scale enterprises (MSMEs).

Officials said the reasons behind increasing the investment target of the IT and electronics sector were three-fold: the advantage of the state being close to Delhi, the national capital; easy availability of skilled workforce; and interests shown in the sector by both national as well as international investors.

“We aim to make Uttar Pradesh the future data centre hub of the country and the targets have been kept high as investors have already shown interest. Groups like Hiranandani, which had earlier committed to Rs 9,000 crore Data Centre project, have committed another Rs 30,000 crore as they see prospects here,” Additional Chief Secretary (Infrastructure and Industries; Information Technology and Electronics) Arvind Kumar said.

“That is why, the state government decided to come out with specific data centre policy to encourage the sector further, and is also in the process of establishing the first Data Centre Park” in Noida, which is in the National Capital Region,” Kumar added.

Officials said during ministerial delegation visits to countries like South Korea, Japan as well as Singapore, companies there committed to investing in data centres.

Officials said that Star Consortium of Singapore has promised to invest Rs 2,000 crore for setting up a data centre and logistic services hub in the state. Another company, SLG Capital, had signed an MoU with the government for an investment of Rs 8,273 crore in setting up a capital data centre in the state.

A senior official said that during the government delegation visits to South Korea and Japan, Samsung and NTT Group, which is working in the telecommunication sector in Japan, also showed interest in opening data centres in Gautam Buddh Nagar.

Also, there are two project proposals, worth over Rs 2000 crore each, from the Adani Group in the data centre sector, the official added.

The areas in which these companies are showing interest are quantum computing, 3D printing, 5G, virtual reality and even space tech.

Recently, the UP government in its new data centre policy revised the earlier target of creating 250 MW of storage capacity by 2026 to now 900 MW, and promised to fund up to Rs 10 crore for setting up of “Centre of Excellence Data Centres” along with other incentives like easy availability of electricity and other exemptions.

“The biggest roadblock is that these investment proposals in data centres have come for Gautam Buddh Nagar (Noida), while the incentives offered in our policy are for setting up of data centres in other parts of the state,” an official said.

Along with this, the government is also receiving proposals in electronics manufacturing for which it has come out with a separate incentive policy. The government claims that UP contributes 26 per cent of the total mobile manufacturing of India, and the target is to increase it further by bringing in more large-scale investments in the sector.