The Rise of Data Centres in India
Data is the new Oil !!

The Rise of Data Centres in India

Executive Summary: Data centers in India are experiencing rapid expansion, driven by various factors including rapid digitization, widespread broadband penetration reaching 85%, the thriving e-commerce and banking sectors, and the deployment of 4G and 5G technologies. This growth is facilitated by improved power availability, robust optic fiber and telecom infrastructure, and supportive government policies and is attracting newer players from the real-estate and the infrastructure sectors to enter into the data center market. With a burgeoning internet user base and a rapidly expanding digital economy, India is poised to increase its data center capacity from 400 MW in 2019 to 2000 MW by 2025 and further to 4000 MW by 2029. This trajectory positions India among the world's leading data center capacities.

https://www.dhirubhai.net/pulse/rise-data-centres-india-rakesh-kumar-teqjc


India's data center capacity has undergone exponential growth in the past four years, surging from 350 MW in 2019 to 640 MW in 2022, 890 MW in 2023, and an impressive 1700 MW by April 2024. This rapid expansion is expected to continue, with plans for over 1 GW of additional capacity already in progress. Despite a 40% increase in costs, rising from Rs 40-45 crore per MW to Rs 60-70 crore per MW, an estimated additional investment of Rs 50,000 crore is slated for the next three years. This surge marks a significant departure from previously favored locations like Hong Kong and Singapore in the Asia Pacific region.

Over the last 15 years, India's broadband base has witnessed remarkable growth, with broadband teledensity climbing from a mere 7.5% in 2010 to an impressive 85% in 2024. With nearly 800 million Indians now connected to high-speed Internet, demand for streaming media, OTT platforms, and social networking has soared. According to the Ericsson Mobility Report 2024, India is projected to lead global data consumption, reaching 62GB per user per month by 2028, surpassing even developed markets like the U.S., Western Europe, South Korea, and China.

This heightened demand, coupled with the latency sensitivity of these services, necessitates data centers to be situated closer to consumption centers. Furthermore, rapid digitization driven by e-commerce, universal banking, internet payments, online streaming, and the adoption of new technologies such as 5G, IoT, and AI further emphasizes the need for robust data center infrastructure.

Despite impressive growth in telecommunications infrastructure such as 4G / 5G sites and fiber kilometers enabling an extensive digital economy, data center infrastructure has lagged behind. Despite being the world's largest data consumer and generating 20% of global data, India until recently held a data center capacity share of less than 3% globally. This prompted high growth priority from Indian central and state governments, leading to favorable policies to attract both domestic and foreign investors to tap into greenfield market opportunities and incentives.

Fortunately, the situation is changing rapidly due to India’s strategic advantages, including ample availability of land, skilled resources, a significant thrust given to power generation, and recent favorable government policies that have attracted substantial investments.

Land and power are two major requirements for setting up data centers. Power consumption in data centers globally is expected to consume 5% of total generated power, and India is following suit. Over the last decade, India has nearly doubled its power generation capacity to reach 426 GW by December 2023, including a significant contribution from non-fossil fuel sources. As per the National Infrastructure Pipeline 2019-25, energy sector projects accounted for the highest share out of the total expected capital expenditure of US$ 1.4 trillion. The sector also attracted substantial FDI inflows.

India is rapidly changing its energy mix in favor of non-fossil sources, aiming to achieve 500 GW by 2030, accounting for more than 50% of capacity. Sustainability is a prime focus for the data center industry, with goals including achieving net-zero emissions across operations and 100% renewable energy by 2030.

The size of India’s data center market is expected to reach 5 GW by 2029, with a compound annual growth rate of 40%. India ranks as the 13th largest data center market globally, with Mumbai alone accounting for 45% capacity share. The market is projected to grow substantially, with Mumbai's capacity projected to reach 1,500 MW by 2029.

Government policies have played a significant role in facilitating this growth, including mandates from RBI, policies from the Ministry of Electronics and Information Technology, and the Digital Personal Data Protection Act, 2023. Several states have also introduced data center policies to attract investments, recognizing the growth opportunities in this sector.

Though India entered the data center space relatively late, strong demand fueled by rapid infrastructure growth and supportive government policies is driving rapid capacity expansion towards next-generation, green data centers. Expect continued growth in this industry as it fuels India’s digital transformation in the coming years.

#DataCenterExpansion #IndiaTech #DigitalIndia #BroadbandGrowth #EconomicBoom #5GRevolution #InternetEconomy #InfrastructureDevelopment #PowerGeneration #GreenDataCenters #SustainableFuture #GovernmentPolicies #InvestmentOpportunities #DataConsumption #GlobalLeader #DigitalTransformation #RapidGrowth #RealEstateInvestment #TelecomInfrastructure #RenewableEnergy #NetZeroEmissions #GovernmentSupport #DataSecurity #ITInfrastructure #MarketGrowth #TechInvestments #FutureOfTech

要查看或添加评论,请登录

RAKESH KUMAR的更多文章

社区洞察

其他会员也浏览了