India is on the brink of a data centre revolution, with the potential to expand its data centre capacity fivefold, according to a recent report by Cushman & Wakefield. The country requires an additional 1.7-3.6 gigawatts (GW) of data centre capacity beyond the already planned 2.32 GW colocation capacity, which would elevate the total potential capacity to over 5 GW.
As of now, India’s colocation data centre capacity stands at 977 megawatts (MW) across its top seven cities. Remarkably, 258 MW of this was built in 2023 alone, marking a 105 percent year-on-year growth over the installed capacity in 2022. The current under-construction colocation capacity addition is set at 1.03 GW for 2024-2028, with an additional 1.29 GW planned, bringing the total projected capacity to 2.32 GW by 2028.
This growth is driven by a surge in data consumption, propelled by increasing digital penetration and the adoption of data-intensive technologies. More than 90 percent of this capacity is concentrated in key markets such as Mumbai, Chennai, Delhi NCR, and Hyderabad. Mumbai leads the data centre market, while Hyderabad and Delhi NCR are rapidly emerging as new hubs.
Vivek Dahiya, Managing Director and Head of the Data Centre Advisory Team, Asia Pacific, Cushman & Wakefield, highlighted the exponential growth of the Indian data centre industry over the past few years. This growth has been particularly rapid post-Covid, due to rising digital penetration and the adoption of new technologies like 5G, cloud computing, IoT, and Generative AI.
‘We believe India needs close to 5 GW-6.9 GW of total installed capacity to achieve healthier ratios. This necessitates commissioning 1.7-3.6 GW of additional projects beyond those under construction or planned. We anticipate this growth trajectory to continue and expect both existing players to expand and new entrants to join the market in the near-to-medium term,’ said Dahiya.
The report emphasized the need for significant investment in new data centre projects. This increase in investment is crucial to meet the growing demand for Artificial Intelligence (AI), which is expected to further boost the overall demand for data centres in India.
Gautam Saraf, Managing Director, Mumbai, and New Business at Cushman & Wakefield, stated that India is well-positioned to become a major global hub for data centres. ‘This study aims to highlight the immense potential and opportunities within India’s data centre sector. While much attention has been given to supply, our analysis uniquely focuses on the demand side of the equation. We are optimistic that a collaborative effort from all stakeholders will propel India to the forefront of the global data centre market,’ he said.
The findings of the report underscore the need for continued expansion and investment to meet the increasing demand for data storage and processing, setting the stage for India to emerge as a leading global data centre hub.
