- Mumbai, Delhi-NCR, and Bengaluru collectively account for over 55% of the country’s data centre capacity.
- Data centre capacity increases from 1,150MW in 2023 to 1,700MW by 2025, reflecting a robust growth rate of 22%.
- India presents the potential to add an additional 500MW of data centre capacity over the next four years.
India’s data centre market, valued at $7 billion in 2023, is poised for significant growth, with forecasts projecting a compound annual growth rate (CAGR) of 8 per cent, culminating in a market value of $8 billion by 2025.
The remarkable expansion, as documented in a report by 1Lattice, is underscored by an anticipated increase in data centre capacity from 1,150 megawatts (MW) in 2023 to 1,700 MW by 2025, reflecting a robust growth rate of 22 per cent.
The concentration of data centres in metropolitan hubs such as Mumbai, Delhi-NCR, and Bengaluru plays a pivotal role in this growth, with these cities collectively accounting for over 55 per cent of the country’s data centre capacity.
Supportive government initiatives
Abhishek Maiti, Director of Technology and Internet at 1Lattice, attributes the surge in demand to rising data consumption, the advent of emerging technologies, and supportive government initiatives.
Programs like the ‘Data Centre Incentivisation Scheme’ and ‘Make in India’ have been instrumental in fostering a conducive environment for investment in this sector.
Moreover, the global data centre market, projected to grow from $227 billion in 2023 to $250 billion by 2025, highlights a broader shift driven by cloud computing, edge technologies, and artificial intelligence/machine learning. This global context enhances the significance of India’s burgeoning data centre landscape.
Furthermore, India presents the potential to add an additional 500 MW of data centre capacity over the next four years, having already experienced substantial growth from 540 MW in 2019 to 1,011 MW in 2023. T
he first half of 2023 alone witnessed a 21 per cent surge in data centre absorption, particularly from tier 2 and tier 3 cities, which signals increasing demand for edge data centres.