26 May 2016, 8:59 AM IST

Currently valued at $2.2 billion, India's data centre infrastructure market is expected to touch $4.5 billion by 2018. India is poised to be the second-largest market for data centres in Asia-Pacific by 2020 and the investments are expected to reach $7 billion, according to a report by Internet and Mobile Association of India (IAMAI).

The report was released by Amitabh Kant, CEO of NITI Aayog. Titled 'Conducive Policy & Regulatory Environment To Incentivise Data Center Infrastructure,' the report highlights the opportunities for the sector.

"India can grow to an infrastructure hub attracting $7 billion or 4.5% of the world's investments by 2020 and there is an urgent need to create appropriate incentives to attract the investments and enable better connectivity, data speed and create more jobs in the country," says the report.

The report also highlights various legal, policy and regulatory enablers that are essential to promote data centre industry and strengthen India's positioning in the global data centre market. It strongly challenges mandatory data localization norms which would reduce competitiveness and would have a deterring impact on the GDP of the economy, driving away India's extensive ability to attract data centre investments.

"Cloud Computing and virtualization will lead the technology evolution and continue to trigger growth in the data centre services market provided there is a seamless movement of data across national borders benefiting both businesses and consumers, enabling them to access the best available technology and services wherever those resources may be located."

The report warns that generating investment in data centres in India is about developing a regulatory regime that incentivizes private companies to invest in India. If the present regime is not reformed, India will forgo a valuable growth opportunity.

The high cost of internet bandwidth is seen as a big impediment in the growth of data centre market in India. The cost of badwidth is too high in India as compared to peers, according to the report.

There's also an emphasis on green data centres in the report. It says that there should be government initiatives to promote green technology enabled data centres. The green DC Standard in Singapore helped organizations establish systems and processes necessary to improve the energy efficiency of their data centres with a recognized framework as well as a logical and consistent methodology.

http://cio.economictimes.indiatimes.com/news/data-center/data-centre-market-in-india-to-touch-4-5-billion-by-2018-iamai/52443540