The government has accorded infrastructure status to data centers with more than 5 megawatt capacity of IT load, according to a recent notification.
The move helps data centre companies to get easier access to institutional credit at lower rates, attract foreign investments etc.
"Data Centre is included in the Harmonized Master List of Infrastructure sub-sectors by insertion of a new item in the category of 'Communication'," a notification dated October 11, said.
Data centres that are "housed in a dedicated/centralized building for storage and processing of digital data applications with a minimum capacity of 5 MW of IT load" will be considered eligible for infrastructure status, as per the notification.
The capacity of data centres is measured in terms of power they consume which reflects on the scale of the server they are hosting in their facilities.
Finance Minister Nirmala Sitharaman had made an announcement in the budget speech for 2022-23, that data centres will be granted infrastructure status.
According to an ICRA report, data centres capacity expansion in India by both foreign and local firms is expected to add investments to the tune of Rs 1.05 lakh to 1.2 lakh crore over the period of next five years.
Indian corporates like the Hiranandani Group, Adani Group, and foreign investors including Amazon, EdgeConnex, Microsoft, CapitaLand, Mantra Group have started investing in Indian data centres.
Along with them, existing players like CtrlS, Nxtra, STT India are also expanding their capacities.
A CBRE report released in September said India's data centre market has witnessed an investment of USD 14 billion (Rs 1.15 lakh crore) in the last five years, and the cumulative funding could cross USD 20 billion (Rs 1.64 lakh crore) by 2025 as investors look for assets with stable income.