India's Data Center Revolution: A $100B Opportunity

India's data center sector is poised for remarkable growth, with investments projected to exceed $100 billion by 2027. 

India's current data center capacity stands at approximately 1,255 MW, which is projected to expand to around 1,600 MW by the end of 2024 and further reach 2,070 MW by the end of 2025. This is driven by the rapid adoption of digital technologies, government initiatives, and growing data consumption across industries.

The growing adoption of digital technologies across various sectors, from finance to healthcare, is driving demand for data storage and processing capabilities. The government's focus on digital India and its supportive policies are encouraging investments in data center infrastructure.
This surge is also driven by increasing digital adoption, an emerging demand for cloud services, and the country’s aspirations to become a hub for next-generation technologies such as AI, 5G, and cloud computing.

Next we see major global tech companies are setting up their data centers in India to cater to the growing Indian market and leverage the country's talent pool. Multinational cloud providers such as AWS, Microsoft, and Google are expanding their footprint in India to cater to the growing demand for cloud services and data localization requirements.

Additionally, Indian real estate firms are entering the data centre space, leveraging their expertise in large-scale infrastructure projects. Partnerships like AdaniConneX (Adani Group and EdgeConneX) illustrate this trend.

Global private equity firms such as Blackstone, Brookfield, and GIC are increasingly investing in Indian data centres, attracted by high returns and the sector’s growth potential.

Key cities like Mumbai, Chennai, Delhi-NCR, and Bengaluru are emerging as major data center hubs, attracting significant investments and driving the overall growth of the sector. This expansion is expected to create new job opportunities, boost economic growth, and position India as a global digital hub.

By 2027, the sector is expected to surpass USD100 billion in cumulative investments, a reflection of both demand-driven growth and strategic initiatives by operators to scale capacity. This reflects not only demand-driven growth but also the strategic initiatives of operators and investors to scale capacity and meet future needs. India’s data center boom underscores its pivotal role in the global digital economy.

Dr. Deepak Kumar Sahu, Editor-in-Chief-VARINDIA