Google's proposal to set up a server farm in India comes amidst a surge in the number of internet users in the country. A local server will allow users to access the internet faster and also save on accesses costs from international locations when volumes increase.

Google's server farm in India will also boost the country as a preferred destination for competing companies like Microsoft and Yahoo!.

Server farms host websites and also act as a storehouse for all information available on the internet. It will store e-mails, blogs, photos, documents and chat records, and make it available to users when they demand it.

Google's earlier plan to set up a server farm in the country was thwarted by infrastructure bottlenecks. Google then went to Taiwan instead to build its farm. The California-based company was in the news recently over its plans to set up an SEZ in India.

Google co-founder Larry Page had also been in India recently on a low-profile visit. He had offered assistance to help improve the operations of Aravind Eye Hospital in Madurai. Page also announced that Google would provide technology of Google Earth to map areas of blind population, apart from revamping the portal of the hospital. Google would also promote its advertisements, helping it commercially.