India has emerged as the leader in the Asia-Pacific data centre industry (excluding China), surpassing countries like Singapore, Australia, South Korea, Japan, and Hong Kong in terms of installed capacity. This reflects the escalating demand for data services in one of the world’s fastest-growing major economies.
India is rapidly establishing itself as a leader in the Asia-Pacific data centre industry. With an installed capacity of 950 MW and an anticipated addition of a further 850 MW by 2026, India is set to outpace many major APAC countries in this sector.
This growth trajectory is bolstered by substantial investments, amounting to $40 billion in funds dedicated to expanding and enhancing its data centre infrastructure. In 2023, over 85% of the $27 billion committed investment was directed towards the development of hyperscale facilities.
This rapid growth is expected to continue in 2024, with planned supply exceeding 330 MW across various cities. These funds are likely being allocated towards building new facilities, upgrading existing infrastructure, and incorporating advanced technologies to improve efficiency and security.
Having said that, India's digital economy is expanding rapidly, with increasing internet penetration, the proliferation of smartphones, and a surge in digital services and applications. This creates a robust demand for data storage and processing capabilities.
Secondly, supportive government policies and initiatives, such as the Digital India program, aim to boost the country's digital infrastructure. These initiatives often include incentives for data centre investments, streamlined regulatory processes, and support for the development of reliable power and connectivity infrastructure.
The total floor space stock for data centres in India reached 16 million sqft in 2023. Data centres remain among the top three preferred alternative assets for investors in the Asia-Pacific region, including India. Global investors retain a keen interest in the Indian data centre market, with many exploring partnerships and joint ventures with local operators. M&A activity among operators is expected to rise in the coming years to address the growing number of players in the market.
The growth is complemented with the growing integration of cutting-edge technologies, such as artificial intelligence, machine learning, and renewable energy sources, is enhancing the efficiency and sustainability of data centres in India. This not only reduces operational costs but also aligns with global sustainability goals.
With these factors in play, India is poised to cement its leadership credentials in the Asia-Pacific data centre business, providing a robust, scalable, and secure environment for data storage and processing that can support the region’s growing digital needs.
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