According to the Investment Information and Credit Rating Agency (ICRA), India's data centre capacity is projected to reach between 2,000 and 2,100 megawatts (MW) by FY27, supported by anticipated investments ranging from US$ 5.95 to 6.54 billion (approximately Rs. 50,000-55,000 crore). This growth is largely attributed to the ongoing digital boom and initiatives focused on data localization.

As of March 2024, India’s existing data centre capacity stands at 950 MW, with major players such as NTT Global Data Centres, CtrlS Data Centres, STT Global Data Centres, Sify Technologies, and Nxtra Data controlling 85% of the market. This concentration highlights the significant influence these companies have on the landscape of data management in the country.

Ms. Anupama Reddy, Vice President at ICRA, noted that the surge in data generation, combined with the emphasis on data localization, is acting as a catalyst for a transformative shift in India's data centre landscape. Several factors are contributing to this data explosion, including the availability of low data tariff plans, widespread access to affordable smartphones, the increasing adoption of new technologies, and the growing user base of platforms in social media, e-commerce, gaming, and over-the-top (OTT) services.

Furthermore, the demand driven by artificial intelligence (AI) is expected to multiply significantly in the next three to five years, presenting substantial opportunities within the sector. Approximately 95% of the existing capacity is concentrated in six major cities, with Mumbai and Chennai leading the market. Mumbai, in particular, contributes over 50% of the existing capacity due to its strategic connectivity and reliability in power supply, positioning it as a key location for future data centre expansions in India.

As the demand for co-location services grows, especially from hyperscalers and sectors such as banking and information technology (IT), revenues for data centres are projected to witness robust growth, with an estimated 23-25% year-on-year increase expected in FY25.

In light of increasing environmental concerns, Indian data centre operators are also anticipated to enhance their investments in green power. Current investments in green power are below 5%, but this is expected to rise to between 20-25% by 2028, reflecting a commitment to sustainable practices in the industry.

In conclusion, the growth of India's data centre capacity represents not just an expansion of infrastructure but also a response to the evolving demands of a digital economy. With substantial investments and a focus on sustainability, the future of data management in India looks promising, driven by technological advancements and the increasing need for robust data solutions.

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As India moves towards a future with enhanced data capabilities, the strategic growth of data centres will play a crucial role in supporting the country’s digital ambitions and ensuring that it remains competitive in a rapidly evolving global landscape.