Learn How Data Localization Increases Demand for Data Centre Services

Today, India is one of the biggest producers of data and the nation’s strong technology penetration and young demographic is contributing to a data consumption growth rate of 72.6% in 2020 as per a report by Assocham-PWC. In 2020, digital data in the country is expected to rise voluminously to 2.3 million petabytes – growing at double the global rate.  Currently, Indian politicians and businessmen are debating how to store this gigantic data volume inside national borders. 

What is Data Localization?

Data localization is the storing of data in physical devices within the borders of a nation that produces the data. Many governments try to boost data localization to promote and protect data security inside their borders. 

Data localization is made necessary due to reasons like national regulations which mandate that specific data sets be stored physically in servers within the nation. This method is also a cost-efficient solution for cross-border transfer of data. Plus, large enterprises favor data localization to protect the privacy of their information from hackers who can potentially breach the data if it is stored in a foreign country. 

Present Data Laws in Effect

Currently, only the RBI (Reserve Bank of India) has stipulated a single regulation for data localization in the nation and it pertains to payment platforms. Other bills are still in draft form and have not yet been made into laws. 

The 2018 Data Protection Bill mandates fixed requirements for data transfer across borders. Mukesh Ambani recommends that all Indian data should ideally be owned by Indian citizens. He says that the government should end data colonization by foreign companies. His viewpoint is that India’s people should own and control the nation’s data and not global enterprises. 

2018 Personal Data Protection Bill

This bill postulates objectives to safeguard and secure personal info and prevent data breaches. It proposes particular segments of confidential data as critical and that this information should be stored only in data centres or servers within India. For non-sensitive data, at least a single copy can be stored in Indian servers and it can be allowed to transfer outside the nation after getting approval from the Indian government. But these other countries need to guarantee adequate data protection.  

Challenges of Data Localization in India

Catching up to the changing standards of data and privacy, India is on its way to upgrade the IT infrastructure for securing massive volumes of data generated within the nation. To avert any risks of data exposure and cyber-security, the Indian government has recently taken proactive measures to strengthen the country’s IT capabilities and offer incentives to lay down an efficient infrastructure rapidly to secure its national data. 

Facilitating the storage of data locally enables reduction of network latency and improves agility. Businesses can expect the availability of advanced technological infrastructure at a lower cost while storing all data locally. The Reserve Bank of India (RBI) has mandated organizations to store all kinds of financial data locally, further accelerating data centre growth in India. 

Being at the forefront of a digital revolution and enabling businesses to leverage advanced IT Infrastructure and colocation services, STT GDC India is geared up to support this shift by offering customer-centric data centre services, powering and protecting mission-critical infrastructure, and delivering exceptional operational performance as well as unparalleled security and reliability. 

The Way Forward

The data economy is a fast-growing sector in the nation and Covid-19 lockdowns have significantly increased data consumption. Therefore, the need of the hour is to implement suitable data localization laws and policies to motivate local companies to operate data centres. The data centre services market in India is expected to produce a revenue of $4 billion by 2024. 

To effectively manage the rising data volume due to data localization in India, data centre services’ capacity needs to be upgraded as quickly as possible. While there’s an increasing need for data centre services, the industry faces regulatory hindrances impacting the pace of data centre establishment. 

However, with the growth trajectory of digital economy in India, necessitating the importance of Data Centres is critical for fulfilling the growing demands of the digital population of the country. The need for a robust Data Centre infrastructure in India is further necessitated by the proposed Data Protection Act, with provisions of data localization and protection of the digital sovereignty of the country in today’s digitally connected world.

Other roadblocks are expensive networking components and real estate, availability and quality of adequate brick and mortar infrastructure and issues in using uninterrupted power supply to maintain continuous data centre services. The way forward thus is to implement Prime Minister Narendra Modi’s recommendation of implementing a ‘plug and play’ ecosystem. 

To sum up, India is an economical and viable place to develop and operate hyperscale data centre services. The government should contribute by creating effective data localization laws to enable Indian companies to store the nation’s data in their own land. Companies like STT GDC India offer comprehensive data centre services in India through 18 advanced facilities in 9 cities.

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