India will require a 6-fold increase in data centre capacity by 2029, involving investment of Rs 1.5 lakh crore. Maharashtra, TN & UP are offering policies to tap into this opportunity.
The need for vast volumes of digital data to be processed and stored is being driven by new technologies and fast digitization, which is driving up demand for data centers in India. Several Indian states have implemented targeted regulations and financial incentives to draw in data center operators and investors in order to take advantage of this opportunity.
Industry estimates state that India will need to invest Rs 1.5 lakh crore to grow data center capacity sixfold by 2029, from roughly 1,000 MW in 2023 to over 5,000 MW.
When it came to releasing state-specific incentives for the industry, Uttar Pradesh is lagging behind Maharashtra, Telangana, and Tamil Nadu. This is because Noida and Greater Noida are quickly becoming hubs for data centers, particularly as service providers try to meet the growing demand from customers in north India.
A data center (DC) is a location with IT infrastructure, including servers and networking gear, that makes it easier for businesses to store their digital data.
A research from the investment and commercial real estate services company CBRE claims that between 2020 and 2023, India’s DC capacity increased to 880 MW, covering more than 13 million sq. ft. ft. at the end of 2023 and was predicted to reach 1,048 MW by the conclusion of the first half of the fiscal year, or H1 2023.
In October 2023, rating agency ICRA stated that it anticipates the addition of 5,100–5,200 MW of capacity, involving investments of Rs 1.60 lakh crore, over the next six years due to the fact that Indian corporates, foreign investors, and the current DC players have begun to invest heavily in Indian DCs.
“A DC is closely interrelated to the use of the internet…all of us are using the internet all the time, whether on mobiles or laptops or smart televisions… everything is ultimately coming from some data centre because that is where all those websites and applications that we are accessing are running,” Sunil Gupta, co-founder, CEO and MD, of Yotta, a provider of data centre solutions, told ThePrint.
He clarified that most organizations are now shifting away from captive data centers, which store the data within their office premises, to third-party data centers due to the size, scope, and complexity of handling the data storage and processing requirements.
This need is also being fueled by advancements in technology infrastructure and the advent of newer, more sophisticated technologies like artificial intelligence (AI) and 5G.
