India’s data centre industry to see threefold revenue growth in five years; to reach $3.2 bn by FY 2023-24

Robust growth will push for the development of additional real estate space of 7.8 mn sq ft over the existing 8.2 mn sq ft

  • Mumbai and Chennai will account for 76% share of these new capacity additions; other key metros such as Delhi-NCR, Pune and Hyderabad to follow
  • 431 MW (IT Design power load) capacity addition likely to happen during the period between 2020 and 2024 on top of the existing 350 MW capacity added over the past two decades
  • High growth in e-commerce, increasing use of smartphones and social media, government focus on digital economy and rise in technology-driven start-ups have led to rapid growth in data usage
  • The entry of several cloud-based data storage service providers have led to higher demand for data centre facilities
  • Data localisation laws to act as a key driver for the growth of the Data Centre industry

India’s data centre industry that is set to register threefold growth in revenue to US$ 3.2 bn by 2024 is likely to propel the development of additional real estate space of 7.8 mn sq for setting up data centre facilities, according to the latest report, India’s Data Centre Industry – Poised at the tipping point, by leading real estate and property investment management consultants JLL, released today.

Country’s fast-expanding e-commerce sector, use of smartphones and social media, government’s focus on digital economy and rise in technology-driven start-ups have led to rapid growth in data usage and storage, increasing data centre space. In addition to this, the entry of several global cloud service providers is adding to space take-up.

With the advent of the internet and mobile phones, India’s data centre industry continues to provide data storage, computing and other value-added services. To meet the rising demand arising from data localisation and rising data usage, India’s data centre industry capacity is projected to increase by additional 431 MW in the next five years from the current levels of 350 MW (design IT power load) in 2018-19, the report added. This expansion is expected to provide a Greenfield investment opportunity of US$ 4.1 bn in setting up data centres.

Suggested reading: Top 10 best data center service providers in India

Ramesh Nair, CEO & Country Head – India, JLL said, “India’s supremacy in the field of information technology is unparalleled. We’re now witnessing an increasing interest for data centre facilities from enterprises and investors, both domestic and international. Businesses around the world continue to work on data consolidation, storage and cloud adoption. As a result, over the past couple of years, we have seen a spike in demand for data centres. While a significant share of this demand and opportunity is coming from investors, Greenfield acquisitions for co-location and hyper-scale players, and rack migration for corporates offer tremendous business potential.”

“Lower real estate cost and skilled manpower, improving quality of power supply and adequate linkages globally with cable landing stations are some of the key factors driving multi-national players to the country,” added Nair.

Rachit Mohan, India Head, Data Centre, JLL said, “There is an unprecedented growth of consumption patterns by cloud companies around the world and now in India. The anticipated data localization bill, Big data boom backed by IoT, and increasing OTT consumption of data is fuelling opportunity for large global and Indian Colocation Data Center Operators to design and build high-quality Data Centre Infrastructure in India. This digital revolution has become a strong growth engine for the industry, and will continue to attract significant investments in the years to come.”

Dr Samantak Das, Chief Economist and Head of Research & REIS, JLL India said, “India’s 578 mn mobile phone (wireless) data users- the world’s second-largest digital population has been consuming data at the speed of 1500 GB per second and is expected to increase further. This will bring in the need for more space. This need is expected to bring in Greenfield investment opportunity of US$ 4.1 bn, in setting up data centres.”

Growing concerns over cybersecurity, data privacy laws and compliances are transforming the markets around the world. The increasing demand for cloud computing solutions need data centres that are optimized for data storage and speed to deliver the best user experience possible, the report added.

Also read: Top 10 best data center providers in Singapore

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