In. 1) Introduction
On December 6, 2024, Ikigai Law hosted a closed-door roundtable on ‘Cloud Data Center Design Regulations’ in New Delhi.
This event brought together stakeholders from the technology, architecture, policy, and energy sectors to address the critical need for tailored regulatory frameworks for data center design in India. Representatives included data center architects and industry leaders indicatively from Microsoft, Amazon Web Services (AWS), AECOM Group, Gensler, Edifice Consultants, USISPF (US-India Strategic Partnership Forum), USIBC (US-India Business Council), MAIT (Manufacturers Association of Information Technology), and NSEFI (National Solar Energy Federation of India).
2. 2) Context
With With the exponential adoption of GenAI (Generative Artificial Intelligence) and ML (Machine Learning) capacity, India must view data centers as the backbone of the INDIAai mission and provide them with regulatory and implementational support. Data centers, different from other commercial buildings as they have very low occupancy, are categorized as 'commercial buildings'. This compels data center operators to secure exemptions/approvals vis-à-vis Floor Space Index (FSI), green-belt requirements, parking and elevator standards, fire, etc. This repetitive exercise is costly and time-consuming, often pushing launch/expansion dates out. Establishing and operating a data center is a multi-billion-dollar investment, and delays in operationalizing such projects hurt costs and time invested.
The roundtable discussed the need for tailored data center-specific norms in India's National Building Code 2016. It also discussed the implementational challenges that various participants face while working with multiple authorities and complying with ambiguous and conflicting regulatory frameworks.
3) Key Discussion Themes
3.1. Revisiting categorization
Participants highlighted the pressing need to recognize data centers as a distinct category under the National Building Code (NBC) of 2016 by the Union government to create uniformity throughout the country. The current classification of data centers as “commercial buildings” imposes requirements that do not align with their operational realities, such as parking norms, green belt provisions, and fire safety regulations designed for high-occupancy structures.
Data centers are characterized by low occupancy and high equipment density, creating unique design and operational needs. For instance, the requirements for extensive parking spaces are largely irrelevant since data centers have minimal staffing. Similarly, fire safety regulations mandating refuge areas on every floor are redundant, given their specialized use and low human presence.
While we note that the Hon. Finance Minister Nirmala Sitaraman did give data centers infrastructure status in the Union Budget 2023, operationalizing this categorization at the Union government level through tangible policies – such as dedicated categorization under NBC - is critical.
Such reclassification would simplify compliance and approval processes, enabling faster and more cost-effective deployment of these facilities.
3.2. International benchmarks and antiquated standards
The discussion drew attention to the delay in updating the NBC to align with international standards. Participants cited international benchmarks such as the National Fire Protection Association (NFPA) and the Telecommunications Industry Association (TIA) ANSI/TIA-942-C Telecommunications Infrastructure Standard for Data Centers, which provide comprehensive guidelines tailored to global data centers.
In contrast, NBC’s reliance on antiquated norms often creates design inefficiencies and compliance challenges. The rapidly evolving technology landscape further exacerbates this issue, as existing standards fail to accommodate advancements such as AI-driven workloads and gigawatt-scale capacities. Regular updates to the NBC, informed by global best practices, were proposed as a critical step toward modernizing India’s data center ecosystem.
3.3. Inconsistencies across states
Fragmented and inconsistent regulatory environments across states emerged as a significant barrier to establishing data centers. Bureaucratic delays in securing permits and exemptions were noted as a major challenge, often requiring interaction with as many as 25 to 30 authorities. Participants shared examples of prolonged approval timelines, sometimes up to 24 months, due to the lack of standardized processes. The rapid evolution of data center technology often necessitates design modifications during construction, triggering a cascading effect that forces companies to restart the approval, permitting, and exemption process from the beginning.
Another recurring issue was the conflicting regulations across states and jurisdictions. For instance, while one state might permit the stacking of diesel generators to save space, another might prohibit it, insisting on additional land usage. These inconsistencies not only delay projects but also escalate costs significantly. This is further complicated when dealing with multiple Authorities Having Jurisdictions (AHJs) within a city, for instance, Mumbai alone has three different AHJs with separate set of policy norms and permits that must be acquired. Although states have introduced single-window clearance systems to streamline processes, they often fail to integrate all relevant departments. As a result, developers continue to navigate a maze of approvals, leading to frustration and inefficiencies.
Stakeholders emphasized the need for a nationally standardized regulatory framework to address these challenges. This framework should be complemented by clear timelines, service level agreements (SLAs), and accountability mechanisms to ensure timely and efficient approvals. Additionally, participants stressed the importance of automatic or deemed approvals if timelines are not met to mitigate delays caused by bureaucratic inertia.
Additionally, the prolonged duration of the permit process is exacerbated by the absence of a unified platform for submitting applications. These permits are interconnected and often prerequisites for one another, yet there is no consolidated system for submitting all required documents simultaneously. To address these challenges, it is recommended to define clear SLAs for each permit and formulate a standardized permit process flow. Furthermore, establishing a unified, single-window platform for permit applications and approvals would streamline the process, improve efficiency, and reduce delays.
3.4. Unlocking the potential in prototype designs
Another critical theme from inconsistent regulation across states is the challenge of replicating standardized data center designs due to varying local regulations. Participants noted that discrepancies in requirements—such as facade design, green mandates, and diesel generator stacking—increased costs and hindered scalability. A nationally standardized framework would enable designers and architects to invest in prototype designs that can be modified, perfected, replicated across states, and exported globally.
The ability to implement layouts uniformly across jurisdictions without repeated modifications would create a new design economy in India and encourage architects and data center designers to perfect data center designs for the highest efficiency. A cohort of specialized data center designers focusing on optimization and innovation instead of compliance would only add to India’s aspirations in the current techade.
The roundtable emphasized a persistent gap between policy intent and execution. While specific progressive state policies were praised, participants noted that implementation often fell short. Incentives, though well-documented, frequently lacked precise mechanisms for utilization. For instance, subsidies for diesel generators in Telangana could not be availed due to ambiguity in execution processes. This disconnect was attributed to inadequate communication between state leadership and local authorities. Bridging this gap was proposed as essential to ensure that policy benefits translate into actionable outcomes for developers.
3.6. Capacity-building for government officials
A recurring issue highlighted during the roundtable was the gap in understanding among regulatory authorities’ understanding of the unique requirements of data centers. Participants stressed the need for capacity-building initiatives to educate officials on data center operations, technologies, and design considerations. Suggestions included organizing workshops to demystify the complexities of data centers, thereby improving the efficiency and consistency of approvals. Instances were shared where developers had to spend significant time explaining basic concepts of data centers to multiple stakeholders, detracting from the overall development timeline.
3.7. Integrating data centers into urban planning
The discussion underscored the need to approach data center requirements from a fundamental urban planning perspective rather than addressing them through isolated regulatory tweaks. Data centers impact and depend on multiple aspects of urban infrastructure—such as botany for landscaping, road planning for accessibility, plumbing for efficient cooling systems, and power grid resilience. Policymakers must adopt a holistic approach, viewing data centers as an integral part of urban ecosystems. By addressing these interconnected needs comprehensively, India can create a sustainable framework for data center growth, paving the way for broader discussions in future policy development.
4) Next Steps and Recommendations
Key recommendations that emerged from the roundtable:
- Separate Category: Create a separate category for data centers under the NBC. This category should take into account the unique requirements of the data center industry. The design provisions should allow flexible operating ranges for various data center designs and technologies. Ensure this code is recognized and consistently implemented across multiple state and local authorities to streamline approvals and reduce the need for exemptions.
- Task force: Establish a dedicated Task Force under the mandate of the central government, chaired by a senior MeitY official, with representatives from industry, state governments, urban planning bodies, and regulators. This Task Force will address the cross-jurisdictional challenges of data center development, streamline regulatory frameworks, and create actionable solutions within clear timelines. Given the complexity and evolving nature of the sector, a focused body is essential to ensure collaboration, accountability, and the effective implementation of these recommendations, advancing India’s position as a global data center hub.
- Regular updates: The data center-specific section under the NBC should be a living document that is updated regularly to keep up with the rapidly evolving data center technology. Ensure building norms evolve to support the needs of AI/ML workloads and other emerging technologies.
- Effective communication: Establish effective communication channels between national, state, and local authorities to ensure consistent policy communication and implementation. For instance, during the approval process for a data center, hypothetically assume that national policies might mandate energy efficiency standards, state-level policies could dictate green building certifications, and local authorities may impose specific zoning and construction requirements. Effective coordination among these levels ensures timely approvals, aligned directives, and streamlined communication, fostering efficiency and consistent communication.
- Streamlined approvals: Streamline approval processes that provide quicker turnaround times for permits and approvals. Introduce "deemed approval" provisions if authorities don't respond within set timeframes. Consider introducing key performance indicators (KPIs) for authorities to effectively monitor and minimize application processing delays, ensuring a more efficient and streamlined approval process. KPIs for authorities to monitor and reduce application delays.
- Public infrastructure: Provide adequate public infrastructure around the data center sites, including access roads and utility connections such as water pipelines, stormwater drainage, sewage lines, etc.
- Capacity building: Implement capacity-building programs to bring together the government and industry stakeholders on a single platform to discuss and deliberate on the data center-specific issues, operations, and requirements. Such workshops could be helpful for national, state, and local authorities to take suggestions and hear concerns on one single platform.
- Promote cooperation: Promote inter-state competition for data center Investments. Encourage proactive leadership among states to champion tailored, relaxed norms for data centers. Highlight successful models like Gujarat and Uttar Pradesh to foster healthy competition in ease of doing business for data centers.
- Specific design-related recommendations:
- The NBC does not specify a maximum building height based on its use. For data centers, the floor-to-ceiling height is primarily driven by the need for efficient server cooling. Air circulation is optimized using the spaces above the false ceiling and below the raised floor, designed to allow better airflow. A floor-to-ceiling height of 9.5 meters is recommended to meet these cooling requirements.
- Relax restrictions on boundary wall heights to improve campus security.
- Consider revising fire codes and parking requirements to reflect the low-occupancy nature of data centers. This could eliminate unnecessary requirements like refuge areas. Potential models include Tamil Nadu's relaxed parking norms and diesel generator (DG) stacking regulations.
- Allow for more flexible approaches to meeting green requirements, such as off-site tree planting or vertical greenery. Shift the focus from the "number of trees" to the overall decarbonization of the value chain, including renewable energy use and innovative energy solutions.
- Data centers have low occupancy and have minimal impact on city infrastructure, primarily housing equipment for power and cooling. To optimize land use, it is recommended to increase Floor Space Index (FSI) and Floor Area Ratio (FAR) limits, exempt utility spaces (e.g., DG stacks, electrical rooms), and ancillary structures from FSI.
This post has been authored by Rohan Naik, Associate with inputs from Rutuja Pol, Principal Associate.
