India is on the brink of a major digital infrastructure transformation, with its edge data centre capacity projected to triple from 60–70 Megawatts (MW) in 2024 to 200–210 MW by 2027, according to a detailed analysis released by ICRA (Investment Information and Credit Rating Agency) on July 25, 2025. This rapid growth will be driven by the surge in emerging technologies, data-heavy applications, and an increasing need for real-time processing capabilities across multiple industries.

The trend reflects a global movement toward decentralised data centres, as enterprises seek to bring computing power closer to the user, reducing latency and improving operational efficiency.

Global Context: India’s Growing Share in Edge Infrastructure

As of December 2024, the global data centre capacity stood at approximately 50 Gigawatts (GW), of which edge data centres constituted 10%. Regionally, the United States commands the largest share with 44%, followed by the EMEA (Europe, Middle East, and Africa) at 32%, and the Asia-Pacific region at 24%.

In stark contrast, India’s edge data centre capacity accounts for only 5% of its total data centre landscape. If captive facilities (such as those maintained privately by corporations for internal use) are excluded, this figure drops to just 1%, highlighting vast untapped potential for development in this segment.

This lagging share, however, is also a sign of the massive headroom available for future growth.

What Are Edge Data Centres and Why Are They Important?

Unlike large, centralised data centres that manage mass-scale storage and computing operations, edge data centres are decentralised units, strategically placed closer to the user. Their main advantage lies in their ability to process data locally, thereby delivering:

• Lower latency

• Faster response times

• Greater reliability

• Improved bandwidth efficiency

This is especially critical for industries where milliseconds matter—such as healthcare diagnostics, automated financial transactions, autonomous vehicles, smart manufacturing, defence, and real-time monitoring in agriculture.

The hub-and-spoke model, now gaining traction, involves centralised traditional data centres (hubs) handling bulk storage and AI-heavy operations, while edge data centres (spokes) cater to location-sensitive and immediate processing needs.

Sectors Driving Demand in India

India’s edge data centre boom is being fuelled by high data consumption across both traditional and emerging industries. According to Ms. Anupama Reddy, Vice President and Co-Group Head of Corporate Ratings at ICRA, edge centres will play a critical role in supporting industries such as:

• Healthcare: for diagnostics, telemedicine, and wearable health data

• Banking & Financial Services: for transaction validation and fraud detection

• Smart Manufacturing: for IoT-enabled monitoring and automation

• Agriculture: for real-time crop monitoring, weather data, and smart irrigation

• Defence: for surveillance, command-and-control systems, and threat response

These sectors demand real-time analytics, seamless connectivity, and data sovereignty, all of which can be effectively supported through regional edge computing hubs.

Deployment Challenges: Costs, Skills, and Interoperability

While the growth potential is vast, several challenges need to be addressed to realise this vision:

1. High Capital and Operational Costs: Unlike centralised centres that benefit from economies of scale, edge centres are smaller, distributed, and require more customised setups, often making per-unit deployment costlier.

2. Security Concerns: The decentralised nature of edge data centres can increase their exposure to cyber threats and physical vulnerabilities, demanding more stringent data protection protocols.

3. Skilled Manpower Shortage: Tier II and Tier III cities, where much of the edge infrastructure needs to be developed, lack qualified professionals trained in server management, cloud configuration, and network architecture.

4. Interoperability and Standardisation: Ensuring that edge data centres can seamlessly communicate with core centres and user devices remains a technical bottleneck, especially with the increasing diversity in hardware and software platforms.

Higher Rentals for Edge Centres

According to ICRA, edge data centre rentals are expected to be higher than those of traditional centres. This is due to their retail-centric model, which focuses on delivering personalised, near-user services. Despite this, their low-latency capabilities and location-specific advantages make them an essential piece of India’s digital transformation puzzle.

Key Players Leading the Transformation

India’s digital giants and infrastructure providers are already gearing up to dominate the edge data centre segment. Leading names include:

• RailTel: With its extensive fibre network and railway land assets, RailTel is in a strong position to deploy edge infrastructure in underserved regions.

• Major Telecom Operators: Companies like Reliance Jio, Bharti Airtel, and Vodafone Idea are also likely to leverage their existing mobile towers, fibre optic grids, and customer base to scale edge operations.

• Technology Players and Colocation Providers: Firms such as NxtGen, Sify Technologies, CtrlS, and Yotta Infrastructure may explore hybrid models combining edge colocation, cloud integration, and AI services.

Policy and Regulatory Backing

The Government of India has already announced several measures to support the growth of data infrastructure:

• Data Centre Policy: Encouraging public-private partnerships and ease of land access

• PLI Scheme (Production Linked Incentive) for electronics and hardware manufacturing

• Digital India Mission: Pushing for data localisation, digital literacy, and cloud adoption

• State-Level Initiatives: Some states are offering subsidies, power tariffs, and tax incentives for data park development

Together, these policies are expected to create a conducive ecosystem for the proliferation of edge facilities.

The Road Ahead: From Centralised to Distributed Digital Architecture

India’s journey toward becoming a data-first economy depends on how effectively it can transition from a centralised digital architecture to a distributed, edge-enabled framework.

With technologies like 5G, IoT, AI, and blockchain entering the mainstream, edge computing is no longer optional—it’s critical to enabling seamless digital experiences, especially in a geographically diverse and mobile-driven country like India.

By 2027, India’s projected edge capacity of 200–210 MW will still be modest compared to global standards, but it will mark a pivotal shift in infrastructure thinking, bridging the gap between cloud cores and real-world users.

Conclusion

The tripling of India’s edge data centre capacity by 2027, as forecasted by ICRA, signals the dawn of a new digital infrastructure era. As data consumption continues to soar, and enterprises seek faster and more localised processing, edge computing is poised to become the backbone of India’s digital growth.

With RailTel, telecom operators, and policy support leading the charge, the shift from centralised to decentralised data architecture promises greater agility, innovation, and inclusion. While challenges such as cost, skills, and security remain, the direction is clear: India is investing in a faster, smarter, and more responsive data future—one that reaches every corner of the country.

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