Microsoft has announced plans to establish its fourth data centre region in India in the city of Hyderabad in Telangana.

The company revealed that the investment aligns with its commitment to help customers thrive in a cloud and AI-enabled digital economy and will become part of the world’s largest cloud infrastructure.

The new data centre region in Hyderabad will complement the tech giant’s existing network of three regions across the country in Pune, Mumbai, and Chennai. It will offer Microsoft’s entire portfolio across the cloud, AI, productivity tools CRM with advanced data security, and more.

Microsoft said Telangana is emerging as a “challenger” in the Indian IT sector due to its software exports registering an increase of 7% year-on-year to reach $67.4 billion in 2021, citing a government report.

It added that it is partnering with the Telangana government to accelerate its adoption of cloud, AI, IoT, and cyber security tools for governance. This includes efforts to upskill government officials in next-generation technology, support young girls to build careers in cyber security through the CyberShikshaa programme, and partner on skilling programmes like DigiSaksham with the ministry of labour and employment to equip job seekers from rural areas with technical skills.

“Today’s commitment to the people and businesses of India will position the country among the world’s digital leaders,” said Rajeev Chandrasekhar, minister for Skill Development & Entrepreneurship and Electronics & Information Technology. “A Microsoft data center region provides a competitive advantage to our digital economy and is a long-term investment in our country’s potential.”

The new data centre region will also be built with sustainable design and operations in mind, the company said. This will help Microsoft responsibly deliver reliable and highly available cloud services at scale.

Microsoft underlined that customer demand for cloud as a platform for digital transformation, driving economic growth and societal progress across India, is increasing. Microsoft data centre regions in the country contributed $9.5 billion in revenue to the economy between 2016 and 2020, according to a Microsoft-sponsored IDC report. The report also estimated 1.5 million jobs were added to the economy, including 169,000 new skilled IT jobs.

Microsoft isn’t the only big tech firm with an interest in India, as Google Cloud announced in January that it would open a new office in Pune this year. This is part of its ongoing investment in the country after opening its second cloud region in the country last July. The new location will open in the second half of 2022, although the company has already started hiring for positions.