The digital transformation, cloud computing, and government interventions, India is expected to add around 250 megawatts (MW) of data center capacity in 2023, bringing the overall capacity to 1.15 gigawatts (GW) during the year, according to Savills India, a real estate consultancy firm.
“As of 2022, the cumulative operational colocation capacity of data centres in the country exceeded 900 MW totalling over 9 msf gross built-up area. This is mainly concentrated in Mumbai and Chennai due to landing stations for submarine cables that carry internet traffic between countries,” the report said.
The report added that about 2 million square feet (msf) will be added towards data centre growth. States such as Karnataka, Tamil Nadu, Uttar Pradesh, Odisha, Telangana and West Bengal have announced data centre policies in the last two years to facilitate investments, realising the growth potential.
The Indian data centre market witnessed transactions of over 500 acres of land for data centre developments across the country, of which 45% was in Mumbai followed by Hyderabad at 26% and Pune at 14%. The major buyers were still colocation operators (54%) and hyperscalers such as AWS. Microsoft contributed to an extent of 46% for self-build. The key colocation players that acquired land in 2022 across multiple cities include AdaniConnex, NTT, Nxtra, CapitaLand and WebWerks.
According to Niraj Karale, Director & Head, Data Centre Services of Savills India,
“Given the country’s rich network connectivity, cost advantage, stable government, availability of skilled labour and low climate risk, India is well-positioned to serve as a regional data centre hub in Asia. The Government of India-led initiatives such as Digital India, emphasis on self-reliance and data protection through data localisation is expected to increase the volume of data in the country, resulting in an increased demand for data centres and cloud services. We anticipate demand for around 20 million sq. ft. of data centre space across major cities in the next 4-5 years. Going forward the data centre industry’s focus will shift towards being as close as possible to the customer base, including those in tier-II cities like Jaipur, Lucknow, Kochi, and Coimbatore. This trend will drive demand for real estate in tier-II as well as tier-III cities in some regions,”
Last year, India saw an increase in data centre colocation capacity of more than 150 MW, with 60 percent of the additions taking place in Mumbai, and 30 percent in Chennai, Savills India said in a report.
India is poised to be a global hub for data centers focused on cloud computing with a projected growth of USD 8 billion by 2026 and riding on technologies like artificial intelligence, machine learning and analytics.