The Ministry of Investment of the UAE and the Ministry of Electronics & Information Technology of the Republic of India have signed a Memorandum of Understanding (MoU) setting out a framework for the expansion of bilateral investment cooperation in the digital infrastructure sector, with a special emphasis on data center projects in India.

The memorandum, signed in the presence of His Highness Sheikh Mohamed bin Zayed Al Nahyan, President of the UAE, and His Excellency Shri Narendra Modi, Prime Minister of the Republic of India, marks a significant step towards the development of opportunities in digital infrastructure and artificial intelligence between both nations. This reflects the lead taken by the UAE and India in furthering regional and digital connectivity.

The MoU was signed by His Excellency Mohamed Hassan Alsuwaidi, Minister of Investment of the UAE, and His Excellency Dr. Subrahmanyam Jaishankar, Minister of External Affairs of the Republic of India on behalf of the Ministry of Electronics & Information Technology of the Republic of India.

The MoU will allow both countries to jointly explore, assess and evaluate the technical and investment potential of developing data center projects in India with an initial capacity of up to 2 gigawatts. The memorandum will also promote and facilitate investments in Digital Public Infrastructure (DPI), Artificial Intelligence (AI) and aspects related to R&D and Innovation.

Furthermore, to support the deployment of a supercomputer cluster in India, both countries will assess the technical and investment potential of developing AI compute capacity of 8 exaflops for use by government, public, private sectors and academia.

The UAE was the fourth-largest investor in India in 2023 and the seventh-largest source of Foreign Direct Investment overall. Meanwhile, India currently holds a position among the top 15 countries globally regarding data center capacity, boasting a network of 151 data centers spread across its different regions. The country’s internet economy is expected to reach $1 trillion by 2030, a significant surge from $175 billion in 2022.

This growth is largely driven by the widespread preference for digital interactions among consumers and merchants in the country, which has a population exceeding one billion. The trajectory is further accelerated by data localization policies mandating the domestic storage of local data, as well as “Digital India”, an initiative launched by the Government of India to ensure its services are electronically accessible to citizens. The increased data consumption requires enhanced digital infrastructure and a resilient data center ecosystem.

The memorandum between the Ministry of Investment of the UAE and the Ministry of Electronics & Information Technology of the Republic of India focuses on creating strong and effective collaboration by building relationships between public and private organizations in the UAE and India. It also facilitates knowledge exchange.

The Memorandum of Understanding follows the signing of several strategic agreements between the Ministry of Investment of the UAE and respective Ministries in India in January 2024 in sectors including renewable energy, food processing and healthcare.