India’s data center sector may invest $3.7 billion in three years

India’s data center sector will need to invest $3.7 billion over the next three years in order to fulfill the 6 million sq. ft greenfield development opportunity for the industry.
Netmagic data center IndiaIndia’s data center industry is expected to add 560 MW during 2021-23 leading to a real estate requirement of 6 mn sq ft.

India’s colocation data center industry witnessed absorption of 102 MW during 2020, notching higher absorption than most key markets of Europe and America. Colocation capacity grew by around 28 percent to reach 447 MW in 2020 from 350 MW in 2019.

“Rising demand led data center operators and developers to pursue ambitious expansion plans, while some adopted the acquisition route to enter Indian markets, which we expect to continue,” said Rachit Mohan, Head, Data Center Advisory (India), JLL.

The data centre industry is expected to reach 1,007 MW by 2023 from its existing capacity of 447 MW due to the imminent rollout of 5G rollout, IoT-linked devices, data localisation and cloud adoption.

Mumbai and Chennai are expected to drive 73 percent of the sector’s total capacity addition during 2021-23, while other cities like Hyderabad and Delhi NCR emerging as new hotspots.

Robust expansion by global cloud players in the established markets of Mumbai and Pune continues owing to prevailing infrastructure, while new markets like Hyderabad are gaining momentum in this space.

“The supply addition will be complemented by densification of racks and servers, sustainable energy sourcing and use of indigenous resources,” said Samantak Das, Chief Economist and Head of Research & REIS (India), JLL.

Overall data usage increased by 36 percent in 2020 due to increased usage of smartphones and fixed wireless access as per Nokia Mobile Broadband India Traffic Index 2021.