According to a new report by property consultancy CBRE on Wednesday, May 15, India emerged as the country with the largest operational data centre capacity, of around 950 megawatts (MW) in the January-March 2024 quarter. India has surpassed other big players like Australia, Hong Kong SAR, Japan, Singapore, and Korea.
According to the survey, India is expected to maintain its dominance with a capacity addition of about 850 MW between 2024 and 2026, more than its significant counterparts in the region. According to the report, the combined capacity of operational and non-operational data centres, which was estimated to be 1,030 MW by the end of 2023, is expected to rise by 30% annually to reach 1,370 MW in the current calendar year.
“India’s data centre sector, with its resilience and potential for attractive returns, has emerged as a beacon of opportunity for investors. The sector’s allure is further enhanced by the fact that between 2018 – 2023, India secured investment commitments of more than USD 40 billion from both global and domestic investors,” the report states.
What exactly is a Data Centre
A data centre is a specialised facility with networking hardware, computers, and storage devices housed inside that are used to process, handle, store, and distribute data. The support of several IT activities and services, such as data storage, backup, recovery, management, and hosting of websites and apps, depends on these centres.
Importance of a Data Centre
Improved data accessibility, dependability, and efficiency are the results of centralised data administration and storage. In the event of a disturbance, data centres guarantee prompt service restoration by offering strong backup and recovery solutions. In order to facilitate corporate expansion, they provide scalable solutions that can handle increasing data and user needs. Centralising IT resources also improves efficiency by lowering operational expenses and complexity of maintenance. By taking use of economies of scale and common infrastructure, data centres can save capital and operating costs. Data security and legal compliance are guaranteed by cutting-edge security measures and strict adherence to regulations.
Additionally, data centres facilitate cloud services, which offer online access to scalable, adaptable, and on-demand IT resources. Data centres enable global corporate operations and remote work by providing quick and dependable connectivity.
India as a date centre leader
India’s digital transformation has led to an exponential increase in data generation, necessitating robust data infrastructure. Initiatives like Digital India and supportive regulatory frameworks have encouraged investments in data centres.
The Indian data centre industry continues to attract the attention of international investors, many of whom are interested in forming alliances and joint ventures with regional operators. Given the increasing number of competitors in the market, M&A activity among operators is expected to speed up in the upcoming years. This should lead to some consolidation before the industry gets too fragmented.
The data centre industry in India has become a bright spot for investors due to its durability and potential for high profits. The fact that India received investment commitments of over USD 40 billion from both domestic and foreign investors between 2018 and 2023 adds even more allure to the sector. This substantial capital inflow highlights the industry’s high-return potential, which has made it an attractive option for investors, with a preponderance of foreign investments.
Maharashtra, Uttar Pradesh, West Bengal, and Tamil Nadu are the four states with the highest cumulative investment commitments. Additionally, India is drawing attention from international hyper scalers who see it as a great place to grow, with many choosing to use their bespoke build-to-suit (BTS) facilities.
Modern IT services and commercial operations rely heavily on data centres, vital to the digital age’s infrastructure. Motivated by investment, well-trained labour, and supportive policies, India’s dominance in the data centre sector highlights its strategic significance in the global digital economy. India will probably play a bigger role as a hub for data centres as data generation rises, which will greatly advance the country’s economic growth and technological development.
Adani Group to develop India’s first integrated data centre in Visakhapatnam
Last year it was reported that the Adani Group is developing an integrated data centre and technology business park in Visakhapatnam to boost the local technology ecosystem in the region. The investments will be on top of the Rs 20,000 crore already invested in the state, which created more than 18,000 direct and 54,000 indirect jobs, according to a statement from the Group. AdaniConneX, a 50:50 joint venture between Adani Group and EdgeConneX, will host within the park an integrated 300 MW data centre facility.
