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Is India Building Enough to Power Its Digital Transformation?

27/06/2024

It is estimated that India will be adding 464 MW of new Colo capacity each year until 2028. Despite this, India still needs to catch up with other comparable nations. We believe that accelerating this pace could unlock significant opportunities for India’s data centre and technology sectors.

The Indian Data Centre Landscape

An average Indian cell phone user consumes over 19 GB of data per month i.e., the highest in the world. India is experiencing an exponential rise in adoption of internet services, smartphones, social media, and OTT channels. Consequently, the demand for data centres is of high interest to transform India’s digital infrastructure.

In response to this, a steep rise in construction of data centres has been witnessed in India. Both colocation data centres and cloud firm-owned data centres are being built at growing speeds over the last few years. India’s Colo data centre capacity stood at 977 MW (IT Load) across the top 7 cities (H2 2023). About 258 MW of Colo capacity came in 2023. This is a formidable number and surpassed the capacity addition in 2022 which stood at 126 MW, indicating a 105% YoY growth. This exponential growth is driven by several factors, including increased data consumption due to widespread digital adoption and the use of data-intensive technologies.

Data Center Installed Capacity across 7 Countries

How many data centres does India need?

Despite a projected exponential rise in capacity addition of colocation data centres, we believe that India has potential to absorb more. While adding an average of 464 MW of Colo capacity each year until 2028 may seem like good delivery speed, India shall keep building more to capitalize on its digital transformation story. Two key reasons supporting this hypothesis are:

  1. Over the next 5 years, India is likely to see fastest growth in penetration of smart phones, internet, OTT subscriptions, and social media usage.
  2. With the launch of 5G services in 2022, future applications that use generative AI and IoT will require much higher DC infrastructure support than that required today.

INDIA’S DIGITAL ADOPTION TO WITNESS A MULTI-FOLD RISE

India's Digital Adoption graph

Read our report as we explore two key questions regarding the future of DCs in India:

  • Why India needs to ramp up its Colo DC project delivery speed?

  • Is the ongoing capacity addition enough to mitigate the current problem of under-penetration?

* We believe this report is the first step towards uncovering the demand mystery. Our team has conducted a detailed demand assessment, and if you wish to know more, we would be happy to connect you to our relevant experts.

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