India is witnessing a remarkable transformation as its data center industry rapidly evolves, proving itself as one of the hottest growth sectors driven by advancements in artificial intelligence (AI) and the rollout of 5G technology. A recent report by JLL India forecasts this booming industry will surge by 66% by 2026, adding approximately 604 megawatts (MW) of capacity. This growth is not just about numbers; it is poised to reshape the nation's digital infrastructure and propel its status as a global tech leader.
The appetite for data centers stems from the increasing demand for AI capabilities, secure cloud storage solutions, and the necessity to support the burgeoning digital economy. Rachit Mohan, the APAC Lead for Data Centre Leasing at JLL India, notes, "The DC industry is expected to add 604 MW of capacity over the next two and a half years, driven by AI. The shift toward AI-ready infrastructure, coupled with the transformative influence of 5G, is revolutionizing India’s digital ecosystem."
To meet these demands, the industry will require about 7.3 million square feet of new real estate space and approximately $3.8 billion investment over the upcoming years. Significant growth hubs are being identified across the country, with Navi Mumbai, Chennai, and other regions at the forefront.
Navi Mumbai is quickly becoming the epicenter for data centers, with anticipated demand projected to hit 800 MW soon. This satellite city near Mumbai is capitalizing on its strategic location and current infrastructure, making it the preferred choice for hyperscalers and data center operators.
The overall growth of the data center industry is closely tied to India's nationwide 5G deployment, which aims to achieve over 90% coverage by the end of 2023. This superior connectivity is set to encourage data transfer speeds and bolster the availability of real-time services, making the foundation of AI technologies and cloud innovations much stronger.
Weekly headlines reflect the sense of urgency and opportunity within this sector. Just last week, Princeton Digital Group, one of the world’s leading data center operators, entered the Indian market with plans to build its largest facility at Mindspace Airoli West, partnering with Mindspace Business Parks REIT. This partnership drives home the confidence global investors have placed in India’s long-term growth prospects. Another notable entry is Colt DCS, which announced its strategic partnership with RMZ to develop digital infrastructure worth $1.7 billion.
Dr. Samantak Das, Chief Economist at JLL India, emphasizes the multifaceted benefits of this expansion, stating, "This growth will not only spur demand for specialized skills but will also create opportunities across backward-linked industries, reinforcing India's digital infrastructure." He foresees significant job creation, which is especially important as the economy looks to rebound and innovate post-pandemic.
The flurry of activity has also triggered conversations about sustainability, with experts warning about the environmental impact of the rapid expansion of data centers. A recent report by The Guardian highlighted alarmingly high levels of emissions from some of the biggest tech companies' data centers, calling for urgent climate action as India progresses toward leading the technology race. Balancing growth with environmental responsibility is becoming increasingly complex and pertinent.
India’s burgeoning data center industry is not just about infrastructure and investment; it is also about its potential to serve as the backbone for new innovations, such as e-commerce platforms, digital payments, and various AI technologies. The growth of submarine cable infrastructure, linking Indian coastal cities to global hubs like Southeast Asia, Europe, and the Middle East, provides additional connectivity and significance to the data center network.
Overall, the future of India’s data center industry appears bright, filled with opportunities to innovate, invest, and grow. With strategic investments from global players and technological advancements propelling the sector, the nation's data centers could very well redefine the way businesses operate and compete globally.
This exciting phase for India’s data center market invites stakeholders to engage and strategize on how to evolve and push the boundaries of technology, making significant impacts not just domestically, but globally. The commitment to infrastructure development through responsible and sustainable practices will dictate how the future shape of digital readiness will look as the country embraces the AI revolution.
