Telangana Industries and IT minister KT Rama Rao wrote to the Union Finance Minister Nirmala Sitharaman objecting to the establishment of the data embassies in Gujarat International Finance Tec-City (GIFT city) as proposed in the Union Budget.

The letter of Rama Rao came at a time when the Union minister was in Hyderabad to participate in outreach programmes over Budget with stakeholders.

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Rao instead urged Sitharam to modify the budget proposal to provide them with multiple locations that would suit their data security requirements. He said that it would also provide a level playing field for data infrastructure among the states.

The state minister argued that it will be risky to establish International Data Embassies at a single location, particularly since the state is highly prone to earthquakes. Rao pointed out that it was far more advantageous if these were established in Hyderabad.

Rao argued Gujarat as a location posed a security threat since the state shares its border with another country. He suggested that the interests of the client countries should also be considered while choosing the location for the Data Embassies.

Batting for Hyderabad, he said it was in one of the least active seismic zones in the country making it an ideal location for setting up data centers.

“In contrast, GIFT city is located in Seismic Zone-III and is very close to Seismic Zone-IV, indicating that the region is at a high risk for earthquakes. Developing international data embassies in such an area presents potential risks and could have significant consequences for international relations if critical infrastructure gets impacted,” said Rao.

The minister pointed out that only after due diligence, global data center majors chose Telangana to invest in setting up their large data centers. From Amazon Web Services to Microsoft Azure, the state is now home to several hyperscale and edge data centers.

The minister said that the state government launched its Data Center Policy in 2016 and offered several important incentives and approval provisions to facilitate the setting up of data centers. It gave access to dual power grids, low-cost power supply and a high-speed fiber network.

“The overall experience of the companies which have invested in Telangana has been extremely positive. The State will be happy to provide similar support to International Data Embassies,” he assured.