Data center capacity in India to grow six-fold by 2029, ICRA

Increased digitization by enterprises and data localization efforts have resulted in a data explosion, which has paved the way for a surge in data centers in India. Credit rating firm ICRA has estimated that data center capacity in India to grow six-fold by 2029.

Indian corporates such as the Adani Group, in joint venture with EdgeConnex, NTT, the Reliance Group; foreign investors such as Blackstone, BAM Digital Realty, CapitaLand, Princeton Digital Group, Amazon, Oracle, Microsoft – have all started investing massively in Indian DCs. Along with them, existing players like NTT, CtrlS, Nxtra, ST Telemedia Global Development Centres India are also expanding their capacities. Overall, 4,900-5,000 MW of capacity involving investments of Rs. 1.50 lakh crore are likely to be added in the next six years.

ICRA expects the sector to witness a six-fold increase in capacities in the next six years, with Mumbai, Hyderabad and National Capital Region (NCR) to account for 70-75% of the installed data center capacity. Anupama Reddy, Vice President and Co-Group Head, Corporate Ratings, ICRA, said:

“The key triggers for digital explosion in India are the increasing internet and mobile penetration, the Government’s thrust on e-governance, Digital India, adoption of cloud computing, IoT and 5G, growing user base for social media, gaming, e-commerce and OTT platforms. This, coupled with favorable regulatory policies which includes the draft Digital Data Protection Bill 2022, providing infrastructure status to data centers, special incentives from Central and state governments like land at subsidized cost, power subsidies, exemptions on stamp duty, discounts on usage of renewable energy and procurement of IT components made locally, and other concessions are expected to boost data center investments in the country.”

The presence of landing stations, fiber connectivity, uninterrupted power supply, proximity to tenant’s headquarters and high score on disaster proofing are some of the key parameters a DC operator would look for in a location. Mumbai and Chennai have maximum landing stations, with the former being the preferred location for a data center operator.

“Chennai’s reputation took a dent due to the floods of 2017 and 2018. The other key emerging locations are Hyderabad and Pune, wherein some of the large hyper scalers are setting up huge data centers closer to their operation bases in India,” Reddy added.

Increased digitization by enterprises and data localization efforts have resulted in a data explosion, which has paved the way for a surge in data centers in India. Credit rating firm ICRA has estimated that data center capacity in India to grow six-fold by 2029.

Indian corporates such as the Adani Group, in joint venture with EdgeConnex, NTT, the Reliance Group; foreign investors such as Blackstone, BAM Digital Realty, CapitaLand, Princeton Digital Group, Amazon, Oracle, Microsoft – have all started investing massively in Indian DCs. Along with them, existing players like NTT, CtrlS, Nxtra, ST Telemedia Global Development Centres India are also expanding their capacities. Overall, 4,900-5,000 MW of capacity involving investments of Rs. 1.50 lakh crore are likely to be added in the next six years.

ICRA expects the sector to witness a six-fold increase in capacities in the next six years, with Mumbai, Hyderabad and National Capital Region (NCR) to account for 70-75% of the installed data center capacity. Anupama Reddy, Vice President and Co-Group Head, Corporate Ratings, ICRA, said:

“The key triggers for digital explosion in India are the increasing internet and mobile penetration, the Government’s thrust on e-governance, Digital India, adoption of cloud computing, IoT and 5G, growing user base for social media, gaming, e-commerce and OTT platforms. This, coupled with favorable regulatory policies which includes the draft Digital Data Protection Bill 2022, providing infrastructure status to data centers, special incentives from Central and state governments like land at subsidized cost, power subsidies, exemptions on stamp duty, discounts on usage of renewable energy and procurement of IT components made locally, and other concessions are expected to boost data center investments in the country.”

The presence of landing stations, fiber connectivity, uninterrupted power supply, proximity to tenant’s headquarters and high score on disaster proofing are some of the key parameters a DC operator would look for in a location. Mumbai and Chennai have maximum landing stations, with the former being the preferred location for a data center operator.

“Chennai’s reputation took a dent due to the floods of 2017 and 2018. The other key emerging locations are Hyderabad and Pune, wherein some of the large hyper scalers are setting up huge data centers closer to their operation bases in India,” Reddy added. w.media