- a.Lax environmental enforcement
- b.Strict data localization regulations (DPDP Act 2023)
- c.Cheap electricity
- d.Deterioration in Indo-US relation
Answer: (B) Strict data localization regulations (DPDP Act 2023)
Answer as of 2024 — this may have changed since.
PSC's answer 'B' is the regulatory push for storing Indian data in India. The Digital Personal Data Protection Act, 2023 (with its Rules notified in November 2025), together with sectoral mandates such as the RBI's 2018 direction that payment data be stored only in India, obliges companies to build or rent local data-centre capacity. Other drivers are rapidly growing data use (5G, UPI, cloud and AI), 'infrastructure status' given to data centres in 2022 and state incentive policies; Mumbai, Chennai, Hyderabad and Noida are the main hubs. The other options are not recognised reasons: power and water availability are concerns for data centres, not attractions, and neither weak environmental enforcement nor India-US relations is driving the growth.