- SaaS market is expected to grow from $13b in 2022 to $35b by 2025, with data centres contributing to this growth.
- Development of a sovereign cloud infrastructure will further bolster data security and ensure regulatory compliance.
India’s data centre capacity is poised for a remarkable transformation, projected to double from 870 megawatts (MW) in fiscal 2022 to approximately 1,700-1,800MW by fiscal 2025, industry experts said.
The surge is driven by India’s burgeoning data landscape, which now surpasses the combined data volume of the United States and China, as well as the country’s thriving startup ecosystem.
According to a report by Cushman and Wakefield, India has the potential to expand its data centre capacity by as much as five times to fuel its digital transformation.
The report further highlights the need for an additional 1.7-3.6GW (gigawatt) of data centre capacity over and above the planned development of 2.32GW (colocation) capacity, potentially taking the total data centre capacity to over 5GW.
Exponential growth in data consumption
Niranjan Hiranandani, the Past President of ASSOCHAM and CMD of Hiranandani Group of Companies, said that the development of physical infrastructure in the region is at an all-time high, and the data centre sector is poised to grow at an unprecedented pace.
Sunil Gupta, the Chair of ASSOCHAM National Council on Datacenter and Co-Founder, MD & CEO of Yotta Data Services, underscores the exponential growth in data consumption, which has increased from just 300MB a few years ago to 25GB per month, with a projected rise to 62GB per user per month by 2028.
The digital pervasiveness in India is transforming the country into a digital-first economy, surpassing many of the world’s largest economies.
“The development of a sovereign cloud infrastructure will further bolster data security and ensure regulatory compliance, ensuring that data generated within India remains within the country’s borders and is protected by local laws and regulations.”
Mumbai is the hotspot
The data centre capacity in India has grown from around 200MW in 2013-14 to 1,200MW, and it is expected to reach 2,000MW by 2027.
However, according to Cushman and Wakefield data, India’s colocation data centre capacity stood at 977MW across the top seven cities, with around 258MW being added in 2023, representing a 105 per cent year-on-year growth.
The report also highlights that India’s current under-construction colocation capacity addition stands at 1.03GW for 2024-2028, with an additional 1.29GW being planned, taking the total projected capacity to 2.32GW by 2028.
More than 90 per cent of this supply is concentrated in key markets, including Mumbai, Chennai, Delhi NCR, and Hyderabad, with Mumbai emerging as the clear leader in the data centre market, while Hyderabad and Delhi NCR are fast becoming new data centre hubs.
Low construction costs
Vivek Dahiya, the Managing Director and Head of the Data Centre Advisory Team, Asia Pacific, at Cushman & Wakefield, believes that India needs close to 5GW-6.9GW of total installed capacity to achieve healthier ratios, necessitating the commissioning of 1.7-3.6GW of additional projects beyond those under construction or planned.
Shri Surajit Chatterjee, the Co-Chair of ASSOCHAM National Council on Datacentrer and Managing Director of CapitaLand Data Centre, anticipates that the data centre capacity in India is likely to cross the 1,600 mark by 2026.
The growth in India’s data centre sector is supported by the country’s low construction costs and its large user market, encompassing both hyperscalers and enterprise segments. The startup ecosystem in India is also flourishing, relying on data centres for scalable and reliable computing resources.
“Cloud services hosted in data centres allow start-ups to launch and expand their operations swiftly, without the need for substantial upfront investment in IT infrastructure. By 2025, the Indian SaaS market is expected to grow from $13 billion in 2022 to $35 billion, with data centres contributing to this growth,” experts said.
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