Amazon Web Services (AWS) will invest Rs 20,761 crore to set up multiple data centres in Hyderabad, the Telangana government announced on Friday.

Telangana's Minister for Information Technology and Industry K.T. Rama Rao said this would be the largest foreign direct investment in the history of Telangana.

AWS will set up Asia Pacific (Hyderabad) Region with three Availability Zones (AZs). It is expected to start operations by mid of 2022.

The AZs consist of multiple data centres in separate distinct locations within a single region that are engineered to be operationally independent of one another with independent power, cooling, physical security, and connections via a low-latency network.

Rama Rao said the investment from AWS would position Telangana as one of the preferred destinations for other companies that are looking to set up data centres in the future.

"This investment from AWS is going to be the largest FDI that the state has attracted since the inception and will act as a strong anchor for attracting other technology investments," he said

Rama Rao had met officials from AWS during his Davos visit earlier in the year and subsequently arrived at the closure on the investment in a swift manner, an official statement said.

KTR, as the minister is popularly known, said that AWS choosing Hyderabad as their preferred destination speaks volumes about the swiftness with which the government operates and also the transparency in the system. "This investment further strengthens the existing relationship that Telangana enjoys with Amazon. We, at Hyderabad, are already hosting the largest office campus of Amazon," he said.

The establishment of data centres like AWS is expected to support Telangana's digital economy and IT sector in a multi-fold way. The new AWS Asia Pacific (Hyderabad) Region will enable more developers, startups, and enterprises as well as government, education, and non-profit organisations to run their applications and serve end-users from data centre located in India.

The establishment of data centres in a region will increase the operations of sectors such as e-commerce, public sector, banking and financial services (BFSI), IT, and more, the government said.

Telangana is one of the most progressive states with policies targeted specifically towards advancing the growth of IT and IT-enabled services (ITES) companies in India. Hyderabad is a city that recorded the highest growth rate in the IT sector over the years and is home to many innovative startups, enterprises, and a skilled workforce.

The government claimed that AWS chose Hyderabad because of the support provided by the government of Telangana, robust policy framework, and because it best met the rigorous requirements for an AWS Region.