India’s data centre market is undergoing a significant transformation, with investments expected to exceed $100 billion by 2027, marking a massive leap from the $60 billion invested between 2019 and 2024. Maharashtra and Tamil Nadu have emerged as the primary hubs for data centre development, with Mumbai, Chennai, Delhi-NCR, and Bengaluru dominating the industry. This surge in demand is driven by sectors like BFSI, technology, fintech, media, and the booming generative AI industry, positioning India as a global leader in digital infrastructure.
Key Investment Destinations
Maharashtra and Tamil Nadu are at the forefront of India’s data centre growth, attracting major investments due to their robust infrastructure and government support. Mumbai leads the charge, holding nearly 49% of the country’s total data centre capacity. Alongside it, Chennai, Delhi-NCR, and Bengaluru make up 90% of India’s data centre stock, showcasing the critical role of these cities in the digital ecosystem.
Growth in Data Centre Capacity
As of September 2024, India’s data centre stock stood at approximately 1,255 MW (~19 million sq. ft.), with projections to grow to 1,600 MW (~24 million sq. ft.) by the end of the year. An additional 475 MW is expected in 2025, primarily in Mumbai and Chennai, highlighting the ongoing expansion of digital infrastructure to meet increasing demand.
Demand Drivers and Occupancy Rates
With an occupancy rate of 75-80%, India’s data centre industry is fueled by the growing need for digital storage in sectors like banking, cloud computing, media, and the public sector. The rise of generative AI, forecasted to grow at 28% annually from 2023 to 2030, is a key driver, with the sector contributing a projected $400 billion to India’s economy by 2030.
Government Support and Incentives
State-level policies in Maharashtra, Tamil Nadu, and Telangana, which recognize data centres as “essential services,” have played a crucial role in attracting investments. These policies offer infrastructure benefits, further enhancing India’s appeal to global and domestic investors and cementing the country’s position in the global digital infrastructure landscape.
Looking Ahead
India’s data centre industry is poised for exponential growth, with the sector expected to exceed $100 billion in investments by 2027. The government’s supportive policies, combined with the rise of sectors like generative AI, will continue to drive demand, ensuring India remains a leader in global digital infrastructure.
Summary of the news
| Why in News | Key Points |
|---|---|
| India’s Data Centre Industry | – Expected to exceed $100 billion in investments by 2027. – Maharashtra and Tamil Nadu are key investment destinations. – Mumbai holds 49% of India’s total data centre capacity. – India’s total data centre capacity was 1,255 MW (~19 million sq. ft.) as of September 2024. – Mumbai and Chennai expected to lead in data centre capacity expansion by 2025. |
| Generative AI Impact | – Generative AI is expected to grow at a CAGR of 28% from 2023 to 2030. – Expected to contribute $400 billion to India’s economy by 2030. |
| State-Level Policies | – Maharashtra, Tamil Nadu, and Telangana have defined data centres as “essential services” and offer infrastructure support. |
| Investment Statistics | – India attracted $60 billion in data centre investments from 2019 to 2024. – 475 MW of additional capacity under construction for 2025. |
| Key Cities in Data Centre Growth | – Mumbai, Chennai, Delhi-NCR, and Bengaluru account for 90% of India’s data centre stock. |
| Occupancy Rate | – Current occupancy rate of data centres is 75-80%. |
| Infrastructure Support | – Cable landing stations in Mumbai and Chennai enhance connectivity, critical for sectors like banking, cloud, and media. |
Wholesale Inflation Eases to 1.9% in Nov...
Centre Earns ₹8,625 Crore via Disinves...
RBI Raises Collateral-Free Agricultural ...
