India’s data centre capacity is anticipated to step up from 1.3 GW in 2024 to 5 GW by 2030. In addition to this, the capital expenditure is likely to touch and cross $22 billion during the period.
In the current scenario, the data centre market in India stands at $10 billion. It is further speeding up at a CAGR of 25%. This year, India’s data centre capacity utilisation is at 85%. India holds the 14th spot globally in terms of the number of data centres. Also, it is the 2nd rapidly evolving market in the Asia-Pacific region.
When compared on the global level, the capital cost of data centre development in India falls in the category of the lowest in the world. It’s just $5.5 million per MW. Investors are on cloud nine as leading players such as Brookfield, Kotak, Blackstone, and ADIA have announced data centre transactions worth $10 billion.
Shedding light on the same, founder and CEO of Innopay and TensorData and rising AIpreneur, Venugopal Naidu Puvvada said, “The Data Centre space is gearing up for a revolutionary shift in India as investors are highly enthusiastic and positive policy effects create a path for expansion. The capital outlay in the range of $20 to $22 billion is on the cards by 2030.”
The data centre value chain revolves around power and connectivity infrastructure, land acquisition, software and systems, IT and cooling hardware, and operations, along with maintenance.
On the one hand, Tier-I spots of India, such as Bengaluru, Mumbai, Delhi NCR, and Chennai, remain the prime data centre hubs. On the other hand, Tier-II cities such as Lucknow, Ahmedabad, Kochi, and Visakhapatnam are evolving as alternative locations backed by 5G rollout as well as low-latency processing requirements.
India’s policy environment for data centres encompasses the 2020 Data Centre Policy Draft and 2022 Infrastructure Status Recognition, which eases the process of securing funds or financial resources. States such as Karnataka, Maharashtra, and Tamil Nadu facilitate special incentives entailing single-window clearances, subsidised land, power, and stamp duty exemptions.
Highlighting the potential of green data centres, Venugopal Naidu Puvvada briefed, “Energy demand from data centres is likely to scale up at 30% annually. AI-powered energy management can optimise power usage across data centres by making adjustments in energy input, workloads, and cooling. This will boost efficiency, cut down electricity bills, and bring a reduction in energy waste. It will eventually free up the capital for reinvestment and innovation, attract global tech & cloud players, and thereby, contribute to the growth of the Indian economy.”
The future of India’s digital economy seems promising, considering the fact that India is home to more than 4500 AI startups and over 50 data centre infrastructure startups. Also, India’s digital economy is expected to go beyond $1 trillion by 2030. Data Centres have a prominent part to play in AI, 5G, IoT, health tech, financial services, and e-commerce.
Data Centres are also passing through the stages of upgradation and prepping to meet the high demands of Artificial Intelligence, with a notable shift towards cooling technologies in demand and denser racks.