India's Data Center Industry Holds Promising Future Amid Growing Demand
The data center industry in India is poised for significant growth, driven by the explosion of data and increased digitalisation across sectors. India currently accounts for about 14 to 15% of global internet users, but its data center capacity is only 6%, indicating a substantial growth opportunity. The surge in data consumption, the government”s emphasis on digital initiatives like Aadhaar and UPI, and the adoption of data-intensive technologies like AI, IoT, and cloud computing are fueling the demand for data centers.
India”s data center capacity has doubled from 350 MW in 2019 to 722 MW in 2022, registering a robust 27% CAGR. Companies in various sectors, including hyperscale cloud service providers, are driving this growth. Singapore-based ST Telemedia GDC, for example, plans to invest over $1 billion in India”s digital infrastructure.
The government is also playing a significant role in the data center surge, with public sector undertakings and government enterprises moving towards third-party colocation data centers to support e-governance initiatives. Telecom regulator TRAI has highlighted India”s progress in the data center sector, and all major global players are investing in the country.
Despite the promising growth, there are challenges to overcome, such as ensuring a reliable and affordable power supply, addressing cooling requirements, and complying with regulations, including those to data security and environmental impact. The rising costs of digital devices and bandwidth are additional hurdles. However, industry experts believe that these challenges are solvable and do not diminish the potential of India”s data center market.
India”s data center industry is at the forefront of a promising future, driven by the country”s growing digital ecosystem and data-driven initiatives. With a vast population of internet users and a increasing demand for data-intensive services, India presents a significant growth opportunity for the data center sector.
The industry has witnessed remarkable expansion, with data center capacity doubling over a short period, fueled by investments from both domestic and international players. The government”s focus on digitalisation and e-governance further strengthens this growth by encouraging public sector organisations to embrace third-party colocation data centers.
However, challenges such as ensuring reliable power supply, addressing cooling requirements, and adhering to regulatory and security standards must be navigated. Despite these obstacles, industry experts remain optimistic about the sector”s potential and its role in India”s ongoing digital transformation.
