The Telangana government is in discussions with Microsoft over a proposal, for setting up one of its largest data centres, with an investment outlay of about $2 billion to $2.25 billion. According to PTI, if the discussions fructify, this would be one of the major investments of the global tech giant outside the United States. Telangana Minister for IT and Industries KT Rama Rao reportedly, kicked off the process of discussions by initiating dialogues with senior management of Microsoft about a few months ago.
“The discussions are in the final stage. Certain issues such as whether it would be a single location or multiple and the size of the investment are yet to be finalised. Microsoft appears to be willing to go ahead with setting up a data centre here, though officially not confirmed,” PTI sources close to the development said.
More information regarding the proposal hasn’t yet been disclosed. Meanwhile, PTI reported that Microsoft is slated to add data centres in at least 10 more countries this year. The global tech giant is also on pace to build between 50 and 100 new data centres each year for the foreseeable future, Noelle Walsh, a Microsoft corporate vice-president who leads the team that builds and operates the company’s cloud infrastructure had reportedly said earlier.
It is worth noting that Microsoft India Development Centre in Hyderabad, which was set up in 1998, is one of Microsoft’s largest Research and Development centres outside the Redmond headquarters. The centre represent’s Microsoft’s strategy of globally shared development to build products and services.
Increase in FDI due to acquisitions in ICT industry
Meanwhile, according to World Investment Report 2021 by the UN Conference on Trade and Development (UNCTAD), India received USD 64 billion in Foreign Direct Investment in 2020, making it the fifth-largest recipient of inflows in the world. The UN report stated that FDI increased 27 per cent to USD 64 billion in 2020 from USD 51 billion in 2019 due to the acquisitions in the information and communication technology (ICT) industry. In addition, the COVID-19 situation boosted demand for digital infrastructure and services globally leading to higher values of greenfield FDI project announcements targeting the ICT industry, the report added.
Some of the major announcements in the ICT industry included a USD 2.8 billion investment by online retail giant Amazon in ICT infrastructure in India. Announced greenfield projects in India contracted by 19 per cent to USD 24 billion, “and the second wave in April 2021 is affecting economic activities, which could lead to a larger contraction in 2021,” it said. It added that the COVID-19 outbreak hit main investment destinations such as Maharashtra, which is home to one of the biggest automotive manufacturing clusters. The outbreak also affected Karnataka (home to the Bengaluru tech hub) leading to a delay in investment and disrupting production.