“With India’s digital economy booming, the demand for robust data infrastructure has never been higher.”
With India’s digital economy booming, the demand for robust data infrastructure has never been higher. The data center industry in India is experiencing unprecedented growth, driven by digital adoption, cloud computing, and government-backed initiatives. Major tech giants and domestic players are in a race to expand their footprints across key markets, with Mumbai, Chennai, and Hyderabad emerging as the country’s data center powerhouses.
Market Leaders and Expansion Trends
Mumbai remains the dominant hub, commanding 44% of India’s data center capacity. Major investments from companies like Equinix, Yotta, CapitaLand, and AdaniConneX have solidified Mumbai’s position as the digital backbone of the country. Google’s upcoming ₹1,144 crore Navi Mumbai facility further strengthens the city’s standing.
Chennai, benefiting from extensive undersea cable connectivity, is quickly growing. Companies like Sify, CtrlS, Princeton Digital, and CapitaLand are ramping up their presence in the city. Similarly, Hyderabad is witnessing a surge in activity, with major players like STT, CapitaLand, and CtrlS investing in expanding their data center footprint.
Bangalore, known for its tech ecosystem, holds a 25% market share, while Noida, Pune, and Kolkata are emerging as critical locations.
Global Giants Betting Big on India
Recognizing India’s potential, global firms are making massive investments. Microsoft recently announced a $3 billion expansion for AI and cloud infrastructure in India, including new data centers. Google and Amazon Web Services (AWS) are also ramping up their investments, focusing on AI-driven infrastructure.
Government Policies Fueling Growth
India’s data localization mandates and Digital India initiatives are propelling the industry forward. The government expects over 100 new data centers by 2025, creating a surge in demand for scalable, energy-efficient infrastructure. These policies are designed to make India a global data center hub, promoting investment and ensuring the provisioning of trusted hosting infrastructure.
Embracing Sustainability and Green Initiatives
As the data center industry in India expands, there is a growing emphasis on sustainability and green practices. Data centers are known for their high energy consumption and significant carbon footprint, making it crucial to adopt eco-friendly measures.
Energy Efficiency: Many data centers are now focusing on energy-efficient technologies to reduce their environmental impact. This includes the use of advanced cooling systems, such as liquid immersion cooling and air-cooled systems, which significantly lower energy consumption.
Renewable Energy: Companies are increasingly turning to renewable energy sources like solar, wind, and hydropower to power their data centers. For instance, CtrlS Datacenters has committed to using 100% renewable energy for its operations.
Water Conservation: Traditional data centers use large amounts of water for cooling. To address this, innovative water management practices, such as water recycling and the use of air-cooled systems, are being implemented to minimize water usage.
Green Building Certifications: Many new data centers are being designed with sustainability in mind, aiming for certifications like LEED (Leadership in Energy and Environmental Design). These certifications ensure that the buildings meet high standards of energy efficiency and environmental responsibility.
Carbon Neutral Goals: Several companies have set ambitious targets to achieve net-zero carbon emissions. This involves not only reducing energy consumption but also offsetting emissions through various initiatives, such as reforestation and investing in carbon credits.
Competitive Advantage of India
India’s data center market holds several competitive advantages over other Asian countries like Singapore and Hong Kong:
- Cost Efficiency: India offers lower operational costs compared to Singapore and Hong Kong. The cost of land, power, and labor is significantly lower, making it an attractive destination for data center investments.
- Strategic Location: India’s geographical location serves as a bridge between the Middle East and Southeast Asia, facilitating faster data transfers and minimizing latency.
- Government Support: The Indian government provides substantial incentives for data center investments, including tax benefits, land and power subsidies, and supportive policies. Initiatives like Digital India and Make in India further bolster the market.
- Growing Digital Economy: With a rapidly expanding digital economy, India presents a vast market for data center services. The increasing adoption of digital technologies across various sectors drives demand for robust data infrastructure.
- Sustainability Initiatives: India’s focus on sustainable and green data centers aligns with global trends, attracting environmentally conscious investors.
Expert Insights
Dillip Guru, Senior Vice President for ESG and Renewable Energy at CtrlS Datacenters, emphasizes the importance of sustainability in the industry: “As the digital world expands, the sustainability challenges these facilities face become more urgent than ever. Real sustainability demands integrating eco-conscious practices at every level of operation”.
Dr. Sasmita K Das, ESG Manager at Nxtra by Airtel, highlights the role of green building infrastructure: “Accelerated demand for digital calls for a much more focused approach to building sustainability into every aspect of a data center right from design to build and operations”.
Leading Data Center Companies in India:
Name of the Company Specialization Market Presence Equinix Inc. Global interconnection and data center services. Strengthened its position in India by acquiring GPX India. NTT Ltd Comprehensive data center solutions with a global network. Significant operations in major Indian cities. Nxtra Data Ltd (Bharti Airtel) Data center services with a strong telecom backbone. Extensive infrastructure across India. Sify Technologies Ltd Integrated ICT solutions, including data center services. Operates multiple data centers across India. ST Telemedia Global Data Centres (STT GDC) Carrier-neutral data center services. Manages several facilities in key Indian cities. AdaniConneX Joint venture focusing on developing hyperscale data centers. Projects underway in cities like Chennai, Navi Mumbai, Noida, Visakhapatnam, and Hyderabad. Yotta Infrastructure (Hiranandani Group) Hyperscale data center solutions with an emphasis on energy efficiency Operates large-scale data center parks, including facilities in Mumbai CtrlS Datacenters Ltd Tier-4 certified data centers offering high availability Plans to expand from eight to approximately 25 data centers by 2024–25, including a 2 million sq ft hyperscale facility under construction in Navi Mumbai. Web Werks Colocation services, cloud solutions, and disaster recovery offerings. Operates data centers in Mumbai, Pune, and Delhi-NCR. Reliance Jio Comprehensive digital services, including data center infrastructure. Investments in expanding data center capabilities to support growing digital services. Recent Developments:
- Microsoft: Announced plans to invest $3 billion over the next two years to enhance its cloud and AI infrastructure in India, marking the company’s largest expansion in the region.
- Amazon Web Services (AWS): Will invest approximately $8.2 billion in the Indian state of Maharashtra over the coming years, aligning with India’s efforts to boost local cloud data storage.
- Reliance Industries: Plans to increase AI adoption across its group companies and establish AI-ready data centers in Jamnagar, Gujarat.
These developments underscore India’s emergence as a key player in the global AI and data center landscape, with substantial investments and strategic initiatives driving the industry’s growth.
Conclusion
With rising competition, the battle for dominance in India’s data center market is intensifying. As global and domestic players accelerate expansion, India is poised to become a leading data center hub in the Asia-Pacific region. The industry’s commitment to sustainability and green practices will play a crucial role in ensuring that this growth is both robust and environmentally responsible.
India’s Data Center Race Heats Up: Who’s Leading the Market?
