{"id":41037,"date":"2025-04-12T19:22:06","date_gmt":"2025-04-12T13:52:06","guid":{"rendered":"https:\/\/www.nextias.com\/ca\/?p=41037"},"modified":"2025-04-17T12:44:49","modified_gmt":"2025-04-17T07:14:49","slug":"india-untapped-data-strategic-asset","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/editorial-analysis\/12-04-2025\/india-untapped-data-strategic-asset","title":{"rendered":"India&#8217;s Untapped Data: Strategic Asset For India"},"content":{"rendered":"\n<p><strong>Syllabus: GS3\/Digital Infrastructure; Security<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Context<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>India holds the potential to transform itself into a global leader in data-driven innovation by technological advancement, and social development in a rapidly growing digital ecosystem.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Digital Data Generation<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>India as Highest User Count:<\/strong> India accounts for an <strong>estimated 20% of the world\u2019s data production<\/strong>, with millions of users on social media platforms like Facebook, WhatsApp, Instagram and YouTube.\n<ul class=\"wp-block-list\">\n<li>Additionally, 82.6% of Indian email users prefer Gmail.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Global Comparison (Natural Resources vs. Digital Data): <\/strong>Other nations have capitalized on their inherent strengths:\n<ul class=\"wp-block-list\">\n<li><strong>China<\/strong>: Controls 70\u201380% of global rare earth processing<\/li>\n\n\n\n<li><strong>Australia<\/strong>: Leads in iron ore mining<\/li>\n\n\n\n<li><strong>Chile<\/strong>: Dominates copper production<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Generative AI Boom:<\/strong> The value of data has been amplified by Generative AI:\n<ul class=\"wp-block-list\">\n<li>McKinsey estimates it could add $2.6 to $4.4 trillion annually to the global economy.<\/li>\n\n\n\n<li>Productivity gains from AI could reach 40%.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Concerns &amp; Challenges<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Underdeveloped Infrastructure: <\/strong>India\u2019s natural advantage in digital data remains largely untapped.\n<ul class=\"wp-block-list\">\n<li>Despite <strong>generating a fifth of the world&#8217;s data<\/strong>, it holds <strong>less than 2% of global data centre capacity.<\/strong><\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Infrastructure Deficit: <\/strong>Global data centre power capacity is projected to triple from 59 GW (current estimate) to 171\u2013219 GW by 2030, growing at a CAGR of 19\u201327%.\n<ul class=\"wp-block-list\">\n<li>In contrast, India\u2019s capacity is currently just 900 MW. Even if it doubles in the next five years, it will remain vastly insufficient.<\/li>\n\n\n\n<li>Traditional barriers such as, Unreliable power supply, Limited cable landing stations, and Insufficient undersea cable capacity.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>India\u2019s Data Centre Gap: <\/strong>India\u2019s current data centre capacity: 900 MW (approx); Expected to double in five years.\n<ul class=\"wp-block-list\">\n<li>Still a small fraction of the needed 40 GW by 2030.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-background\" style=\"background-color:#ebecf0\"><tbody><tr><td><strong>Why Do Data Centers Matter?<\/strong><br>&#8211; These are more than repositories for digital storage \u2014 they are foundational to <strong>economic growth, national security, and technological innovation<\/strong>.<br>&#8211; They act as backbones for <strong>critical sectors<\/strong> such as fintech, e-commerce, healthcare, and artificial intelligence.<br>&#8211; They enable secure, high-speed processing, ensure regulatory compliance, and attract FDI \u2014 forming a robust ecosystem that powers digital economies.<br>&#8211; A 2017 MIT study found that data-driven firms outperform others, with 4% higher productivity and 6% higher profitability.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Case Against Mandatory Data Localisation: <\/strong>While data localisation mandates may seem like a quick fix, they have significant downsides:\n<ul class=\"wp-block-list\">\n<li>May trigger retaliation from other nations, hurting Indian exports<\/li>\n\n\n\n<li>Could raise service prices and reduce competition<\/li>\n\n\n\n<li>Smaller firms may exit the Indian market<\/li>\n\n\n\n<li>May be viewed as a trade barrier, leading to legal disputes<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Policy Landscape and Reform Readiness<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Positive Policy Environment:<\/strong> India is now better prepared to grow its data infrastructure, with:\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/www.nextias.com\/ca\/editorial-analysis\/13-01-2025\/india-data-protection-rules\">Digital Personal Data Protection Act (2023)<\/a> ensuring secure, compliant data use<\/li>\n\n\n\n<li>100% FDI permitted for data centres<\/li>\n\n\n\n<li>Global companies localising services (e.g., Facebook, YouTube)<\/li>\n\n\n\n<li>Large employable workforce ready to support the industry<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-background\" style=\"background-color:#dfdfdf\"><tbody><tr><td>For more information on initiatives, kindly visit the following link: <a href=\"https:\/\/www.nextias.com\/ca\/editorial-analysis\/07-01-2025\/digital-governance-in-india\">https:\/\/www.nextias.com\/ca\/editorial-analysis\/07-01-2025\/digital-governance-in-india<\/a><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Learning from Global Leaders like US and China<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>United States:<\/strong> It offers tax breaks (sales, property, income), accelerated cost recovery, renewable energy credits, and subsidised electricity.<\/li>\n\n\n\n<li><strong>China: <\/strong>It classifies data centres as national strategic projects, offering ultra-low electricity tariffs, corporate tax cuts, and green data centre incentives.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Recommendations for a Data-Centric Future<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Infrastructure: <\/strong>A proportional data infrastructure would demand at least 20% of global data centre capacity.\n<ul class=\"wp-block-list\">\n<li>India needs to invest $400 billion, creating 1\u20132 million direct jobs. support up to 6 million indirect jobs, and construct 800 million sq. ft. of infrastructure, to match its data output.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Tax Incentives:<\/strong>\n<ul class=\"wp-block-list\">\n<li>10-year tax holiday for data centres.<\/li>\n\n\n\n<li>Customs duty exemption on data centre hardware.<\/li>\n\n\n\n<li>5% GST on infrastructure and services.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>PLI and Design-Linked Incentives:<\/strong> Extend PLI-type schemes currently used in electronics manufacturing to the data centre industry.<\/li>\n\n\n\n<li><strong>Infrastructure Financing:<\/strong> Concessional loans for green and high-efficiency data centres.\n<ul class=\"wp-block-list\">\n<li>Subsidised electricity, with the ability to purchase directly from discoms.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Regional Hubs Development<\/strong>: Leverage cities like Dehradun, Shimla, and Chandigarh\u2014where cooling costs are lower\u2014to develop data centre hubs connected via dedicated fibre corridors.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Road Ahead: Urgency and Opportunity<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>As global data production surpasses the sum of all prior human history annually, the stakes have never been higher. Data infrastructure is no longer a technical issue\u2014it is a matter of economic sovereignty, technological competitiveness, and geopolitical resilience.<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-background\" style=\"background-color:#fff2cc\"><tbody><tr><td><strong>Daily Mains Practice Question<\/strong><br><strong>[Q]<\/strong> How can India effectively harness its vast untapped data reserves to achieve economic growth, technological leadership, and social development, while addressing challenges like data privacy and infrastructure gaps?<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><a href=\"https:\/\/www.business-standard.com\/opinion\/columns\/india-s-untapped-data-goldmine-is-a-key-strategic-asset-for-india-125041001204_1.html\" rel=\"nofollow noopener\" target=\"_blank\">Source: BS<\/a><\/p>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/www.nextias.com\/ca\/wp-content\/uploads\/2025\/04\/UPSC-Editorial-Analysis-12-April-2025.PDF.pdf\">Download PDF<\/a><\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>India holds the potential to transform itself into a global leader in data-driven innovation by technological advancement, and social development in a rapidly growing digital ecosystem.<\/p>\n","protected":false},"author":15,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[22],"tags":[],"class_list":["post-41037","post","type-post","status-publish","format-standard","hentry","category-editorial-analysis"],"acf":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/41037","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=41037"}],"version-history":[{"count":7,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/41037\/revisions"}],"predecessor-version":[{"id":41365,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/41037\/revisions\/41365"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=41037"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=41037"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=41037"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}