Union Budget 2025: How It Boosts India’s Data Center Sector
The budget allocates Rs 500 crore for a Centre of Excellence (CoE) in AI, which will support research and innovation in artificial intelligence.
The Union Budget 2025 has introduced several initiatives beneficial to the growth of India's data center industry. With a strong emphasis on infrastructure, talent development, and technological advancements, these measures aim to strengthen India’s position as a global data hub.
A key highlight is the National Framework for Global Capability Centres (GCCs) in tier-II cities. This initiative will improve talent availability and infrastructure in emerging locations, making them attractive destinations for data center setups. With nearly 80% of global firms yet to establish GCCs in India, this move could bring in fresh investments, drive demand for data storage solutions, and enhance regional connectivity.
Additionally, the budget allocates Rs 500 crore for a Centre of Excellence (CoE) in AI, which will support research and innovation in artificial intelligence. This will play a crucial role in advancing AI-driven data analytics and automation within data centers, improving efficiency and scalability.
The introduction of a Rs 10,000 crore Fund of Funds for Startups will further benefit the data center ecosystem by fostering new-age companies specializing in cloud computing, cybersecurity, and AI-driven infrastructure solutions. The previous fund had already catalyzed Rs 91,000 crore in investments, indicating strong growth potential.
To support long-term talent development, the government is expanding infrastructure at IITs, adding 6,500 seats and introducing 10,000 fellowships for advanced research. This will help create a highly skilled workforce, which is essential for managing and innovating within large-scale data centers.
Moreover, a deeptech Fund of Funds is under consideration, which could drive investments in advanced computing technologies like edge computing and high-performance computing (HPC)—critical for data centers handling complex workloads.
With these measures, India is poised to strengthen its digital infrastructure, attract global investments, and enhance its data sovereignty, solidifying its status as a key player in the global data center industry.
Disclaimer: This article is for informational purposes and not an investment advice.