India's first internet security centre is due to become operational in July.
By Habib Beary
BBC reporter in Bangalore
The centre will aim to prevent cyber attacks on key defence, business and government establishments.
India plans legislation on data protection
The project is being handled by the central information technology ministry with the help of the US-based security group, Cert.
Cert is a research and development centre run by the Carnegie Mellon University that helps improve internet security.
The date for the launch of the net security centre was announced by India's Information Technology Secretary Rajiv Ratan Shah in the southern Indian city of Bangalore.
Mr Shah said the government was keen to counter cyber attacks on defence, business and government organisations.
Based in the capital, Delhi, the centre is expected to cost up to $20m.
A second centre will be set up in Bangalore at India's leading research organisation, the Indian Institute of Science.
The government is also planning to introduce a bill in parliament which will seek to protect data, to address the security concerns of companies both Indian and foreign.
"We are ready with the draft of the act which will help in building confidence of customers to outsource work from here", Mr Shah said in an address to a conference organised by India's software body Nasscom.