Digital India – Set Up a Data Centre in India

How to Set Up Data Centre in India

Set up a data centre in India and get ahead of the data deluge. 3E Accounting explains how it’s done.

Global business is undergoing a rapid change where the new norm is a unique hybridization of office and home, as places of work. The new kid on the block is the data economy, and it is driving the demand for data centres. In India, digital data consumption is projected to be twice as fast as the worldwide rate by the end of 2020. Its data centre market itself is expected to be worth four billion USD by 2024. The race is on, and pole position awaits the discerning entrepreneur ready to set up a data centre in India.


A Digital Ecosystem of Success

Thus far, India has not had an environment that is conducive to setting up data centres. Power and real estate have been on the high side, and network connectivity is insufficient to bring in global players.

However, the Indian Government’s flagship programme, called Digital India, aims to usher insignificant change. Its policy on National E-commerce as well as data centre parks is ready to incentivize and push India into the data economy. A massive consumer base, readily available venture capital funding, and new technology are driving the demand for data centres in India.
Data centres house and enable the sharing of all crucial data that is needed to run a business such as emails, big data, etc. There are many operational models to choose from, including cloud-based and green energy data centres. In India, two dominant models are generally preferred:

  • A captive data centre model – organizations build, operate, and manage their own data centre.
  • A colocation data centre model – organizations acquire or lease data centre hosting services from external providers.

Having chosen the data centre model that appeals to you, the next step is to look at company incorporation. You can register your company with the Ministry of Corporate Affairs or MCA, in any one of the following legal structures:

  • Private Limited Company (PLC)
  • Public Limited Company (PC)
  • Limited Liability Partnership (LLP)
  • Partnership Firm
  • One Person Company (OPC)

Once the Certificate of Incorporation has been issued, you will need to get all relevant tax registrations done, such as VAT, GST and service tax. Your company will also need the following:

  • A Permanent Account Number (PAN)
  • A Digital Signature Certificate (DSC
  • A Tax Deduction & Collection Account Number (TAN)
  • A Director Identification Number (DIN)

As far as approvals and licensing are concerned, the Government is still finalizing regulations. Currently, data centre start-ups may require approximately 30 different approvals from both the Central and State governments. These include Other Service Provider (OSP) license, Cloud Service Provider (CSP) license, etc.


Business Ready Partnerships

The data economy is here to stay, and you can get in on the action when you set up a data centre in India. As this is still a nascent sector, regulations may be ambiguous and unclear. Hence, it is advisable to engage business consultants, such as 3E Accounting, who specialize in such procedures. 3E Accounting can help you streamline processes and ensure all regulations are meticulously observed.

Contact 3E Accounting today for customized business solutions that ensure successful start-ups.

How to Set Up Data Centre in India