Summary:

According to ICRA, India's data centre capacity is estimated to increase to between 2,000 and 2,100 megawatts (MW) by FY27, with investments ranging from $5.95 to $6.54 billion (Rs. 50,000-55,000 crore). Currently, the capacity stands at 950 MW, with major operators such as NTT Global Data Centres and CtrlS Data Centres dominating 85% of the market. The increase in data creation and the emphasis on data localization are significant drivers of this expansion, supported by reduced data tariffs and improved smartphone accessibility.

Demand for artificial intelligence (AI) is predicted to grow dramatically over the next three to five years, offering major opportunities in the industry. Currently, 95% of data centre capacity is concentrated in six locations, primarily Mumbai and Chennai. Mumbai alone accounts for more than half of this capacity due to its strategic location and reliable power supply. Data centre revenues are expected to expand by 23-25% year on year in FY25, driven by increased demand for co-location services from hyperscalers and industries such as finance and IT. Furthermore, green power investments are projected to increase from under 5% to 20-25% by 2028.

Source: IBEF

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