Webmasters often ask one question: “Is it beneficial to host the web server closer to the traffic source?“. The short answer to this question is YES. I am going to explain in this post why is it important to host web server closer to the traffic source? It’s based on my several years of experience as a frugal webmaster. 
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SEO experts have different opinions on this question. Some say it does not matter if top-level domain(TLD) of your website is country specific whereas others say it matters a lot because closer server location means faster delivery of the content to the visitors. In one of the interviews, a Google employee also mentioned that Google uses country-code top-level domain names(ccTLD) to decide the target traffic location of the website. But in that video, he also did not say the server location does not play any role. So, it is definitely a confusion for the webmasters.
Let’s consider this example to clarify the confusion. Suppose you have a ‘.in’ website and you have Bollywood related contents on your website. So, most of the visitors will be from India, Pakistan, and ME Countries. There will be a few hundred visitors from the USA and the UK too. If you host your website in any location in the USA, the latency will be significant (ping time: ~300ms). Now suppose you have a competitor who also has ‘.in’ website and he/she also has Bollywood related contents on his/her website. If he/she has hosted his/her website either in India or Singapore, the latency will be negligible (ping time: 10-30ms). In such a scenario, your website may be listed after your competitor’s website in the search result in India because your website will take several seconds to open whereas your competitor’s website will open in 1-2 seconds. Now suppose you have 10-15 competitors and their servers are close to India. Your website might not come to the first page of the search result which is a huge loss.
Conclusion: It’s true that TLD is a big factor in search algorithms. But when you are hosting a website, you have to keep the competition in your mind too. In a fair world where you do not have any competition, you can host your website in any country in South America even if your traffic source is India. But in the competitive world, you need to bring your content closer to the traffic source. Some webmasters host in the USA because the server is very cheap in the USA. If you do not have the budget to take your website closer to the traffic source, you can use free CDN, however, I am not a big fan of free CDN.