India to increase data centre capacity fivefold over next five years
This growth is driven by the rapid spread of digitalisation and e-commerce
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Photo source: Weedezign / iStock
Data centre capacity in India is set to increase fivefold over the next five years. The expansion of infrastructure will require around US$45 billion, creating investment opportunities in key sectors of the economy. This was reported by ANI, a partner of TV BRICS.
Over the past five years, the capacity of Indian data centres operating on a colocation model has increased fivefold – to 2 gigawatts (GW). However, experts note that India’s data centre market is still in its early stages of development.
In a colocation arrangement, a company houses its own server and networking equipment in the provider’s data centre. Data centre operators provide businesses and cloud service providers with physical infrastructure, fibre-optic connectivity, and power and cooling systems on a rental basis. The capital expenditure on server equipment is usually borne by the cloud service providers or businesses themselves.
India is increasingly positioning itself as a regional data centre hub thanks to a number of structural advantages:
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electricity costs and capital expenditure are on average 25–40 per cent lower than in competing markets;
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20-year tax holidays for cloud service providers, which are expected to accelerate investment by hyperscalers (large companies operating extensive data centre networks);
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regulatory requirements and data localisation requirements encourage companies to store and process data domestically.
The main demand comes from hyperscalers, which account for around 60 per cent of the market, followed by the banking, financial services and insurance sector – around 15 per cent. With current data centre utilisation rates at approximately 95–97 per cent, a significant increase in capacity will be required to meet growing demand.
Analysts forecast that the capacity of Indian data centres operating on a colocation model will grow to approximately 10 GW over the next five years, making the country one of the fastest-growing data centre markets in the world.
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