New Delhi, Aug. 01, 2024 (GLOBE NEWSWIRE) -- According to Astute Analytica, the India data center market is projected to hit the market valuation of US$ 21.87 billion by 2032, up from US$ 7.21 billion in 2023 at a CAGR of 13.37% during the forecast period 2024–2032.
India is rapidly emerging as a hub for the data center market, driven by several key factors and supported by substantial statistics. The launch of the 5G network is expected to significantly increase data consumption, with Indian users showing a strong inclination towards online OTT content, gaming, shopping, smart home automation applications, and online security cameras. This surge in data consumption necessitates robust data center infrastructure. The capacity of Tier 3 data centers is projected to grow from 888.5 MW in 2022 to 3365.0 MW by 2029, while Tier 4 data centers are expected to increase from 211.9 MW in 2022 to 1380.2 MW by 2029. Additionally, India's data center capacity is anticipated to double from 0.9 GW in 2023 to approximately 2 GW by 2026.
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The Indian government's initiatives play a crucial role in this growth. The Digital India initiative, classification of data centers as infrastructure assets, and proposed data localization laws are significant drivers. Mumbai, a prime hub for data centers, attracts demand from BFSI, media, and IT/ITeS sectors, supported by government incentives for integrated data center parks. The Maharashtra government, for instance, includes data centers under the Essential Services Maintenance Act, 1968. The data center market in India is expected to surpass $23 billion by 2025, with developers anticipating demand to exceed 3,000 MW by then.
Technological advancements and the proliferation of IoT devices further fuel the demand for data centers. The shift towards edge computing is essential to meet the growing demand from tier II and tier III cities, ensuring lower latency and better service delivery. The availability of high bandwidth speed, lower power tariffs, and the presence of hyperscale’s also contribute to India's attractiveness as a data center hub. The market is witnessing significant investments, with AWS planning to invest $12.7 billion by 2030, Google committing $10 billion to the India Digitization Fund, and Walmart spending over $2.5 billion in 2023 alone. These investments underscore the strategic importance of India as a burgeoning hub for data centers and digital infrastructure.
Investment Outlook of India’s Data Center Market
Amazon Web Services (AWS) has announced a series of substantial investments aimed at expanding its cloud infrastructure in India. AWS plans to invest $12.7 billion into its cloud business in India by 2030, focusing on enhancing its digital infrastructure and cloud services. This is in addition to the $3.7 billion AWS has already invested in the AWS Asia Pacific (Mumbai) Region between 2016 and 2022. With these commitments, AWS's total investment in India is projected to reach $16.4 billion by 2030. These investments are expected to have a significant economic impact, contributing approximately $23.3 billion to India's GDP by 2030 and supporting around 131,700 full-time jobs annually at local businesses.
Google has also made notable investments in India's data center industry. The company has committed $10 billion to the India Digitization Fund, aimed at accelerating digital transformation across the country. Additionally, Google is developing an 8-storey, 381,000 sq ft data center in Navi Mumbai, which is expected to be completed by 2025. These investments in India’s data center market reflect Google's strategic interest in expanding its cloud infrastructure and services in India, positioning itself as a key player in the rapidly growing market.
Microsoft continues to expand its cloud business in India, maintaining three cloud regions in the country. While specific investment figures were not detailed in the provided sources, Microsoft's ongoing expansion efforts indicate a strong commitment to the Indian market. Similarly, Walmart, a global rival of Amazon, has also made significant investments in India, spending over $2.5 billion in 2023 alone. These investments by major technology giants underscore the strategic importance of India as a burgeoning hub for data centers and digital infrastructure.
Key Findings in India Data Center Market
| Market Forecast (2032) | US$ 21.87 billion |
| CAGR | 13.37% |
| By Hardware | Servers (37.05%) |
| By End User | BFSI (32.80%) |
| Top Trends |
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| Top Drivers |
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| Top Challenges |
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Strategic Locations and Real Estate Shaping India’s Data Center Market
Currently, 90% of data centers are concentrated in Tier-1 metro cities, with Mumbai accounting for 60% of the total. However, there is a growing trend of investments in second and third-tier cities like Ahmedabad, Chandigarh, Pune, and Vizag, which offer improved infrastructure at lower costs. India's data center landscape is strategically evolving with Mumbai, Chennai, and Hyderabad emerging as premier destinations for investments, driven by their robust infrastructure and strategic significance. Mumbai, often referred to as the data center capital of India, leads the market due to its advanced facilities and connectivity. Additionally, Delhi-NCR, Bangalore, and Pune are becoming significant players in the sector, further diversifying the geographical spread of data centers across the country. These cities are not just hubs of economic activity but also possess the necessary technological infrastructure, making them attractive to data center operators and investors alike.
The expansion of the data center market in India is monumental, with an expected addition of 791 MW capacity and a requirement of 10 million sq. ft of real estate space by 2026. Real estate asset managers are integral to this growth, managing the intricate logistics and ensuring the availability of adequate space and infrastructure. Notable developments include the Greater Noida Industrial Development Authority allocating 6 acres of land to NTT India for a 70 MW data center, exemplifying the proactive measures being taken to accommodate this burgeoning industry. Additionally, India's ambitious sustainability goals, aiming for carbon neutrality by 2070 and 500 GW of installed renewable energy by 2030, are fostering the development of energy-efficient, AI-driven data centers. These initiatives underscore India's commitment to building a sustainable and technologically advanced data center ecosystem, positioning the country as a global leader in the industry.
Financial Incentives and Foreign Direct Investment (FDI) Acting as Beacon of Light in Boosting India’s Data Center Market
India's data center sector is undergoing a transformative phase, buoyed by a suite of financial incentives and policy reforms aimed at attracting foreign direct investment (FDI). The government's decision to permit 100% FDI under the automatic route has been a game-changer, catalyzing interest from global tech behemoths and infrastructure entities. Tax breaks, subsidies, and a more streamlined licensing process have further sweetened the deal, making India a lucrative hub for data center investments. This strategic move is paying dividends, with the industry poised to amass a staggering USD 28 billion in investments from 2019 to 2025. Tech giants such as AWS, Adani Group, Google, and NTT are capitalizing on this opportunity, announcing expansive plans to bolster their Indian data center operations. The momentum is expected to continue, with projections indicating an infusion of USD 5.7 billion by 2026, spurred by the burgeoning demand for AI and other advanced digital services.
Complementing the central government's initiatives, state-level policies have emerged as significant catalysts in the data center market boom. States like Haryana, Karnataka, and Odisha have crafted bespoke data center policies, offering a mix of financial and non-financial incentives to entice investment, reflecting a decentralized approach that caters to regional nuances. The result is a robust expansion of data center capacity, expected to exceed 1,300 MW by the end of 2024, with significant developments earmarked for metropolitan hubs such as Mumbai, Chennai, and Hyderabad. By 2026, the industry is set to augment its capacity by an additional 791 MW, necessitating an estimated 10 million sq. ft of real estate space, underscoring the rapid scale-up of India's data center infrastructure to meet the escalating demands of a digital economy.
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Revolutionizing the Data Center Industry in India with AI, Blockchain, and 5G
The integration of new technologies such as Artificial Intelligence (AI), Blockchain, and 5G is significantly transforming the data center market in India. AI is enhancing the efficiency, security, and sustainability of data centers by optimizing operations, predicting equipment failures, and automating routine tasks. This technological advancement is crucial as the global data volume is expected to grow at a compound annual growth rate of 21.2%, reaching over 221,000 exabytes by 2026. AI-driven technologies are also improving power usage effectiveness (PUE) and water usage efficiency (WUE), contributing to the sustainability of data centers. Additionally, AI's role in automated threat detection and predictive analytics is bolstering data center security, making them more resilient against potential breaches.
The advent of 5G technology is another game-changer for data centers in India. With its ultra-fast, low-latency wireless connectivity, 5G is driving the need for expanded data center infrastructure to handle the exponential growth in data consumption, edge computing, IoT devices, and digital services. The Indian data center market is expected to grow dramatically, with investments reaching $5 billion annually until 2025, and a capacity of 1,700 MW by 2025. Blockchain technology is also being explored to enhance data security and transparency within data centers, ensuring the integrity of data transactions and user authentication. These technological advancements, coupled with significant investments from global tech giants and supportive government policies, are positioning India as a burgeoning hub for data center innovation and growth.
India Data Center Market Key Players
- Tata Communications Ltd
- STT GDC INDIA Pvt Ltd
- CtrlS Datacenters Ltd
- Sify Technologies
- Netmagic Solutions Pvt Ltd
- Web Werks India Pvt Ltd
- ESDS Software Solutions Ltd
- NxtGen Datacenter and Cloud Technologies Pvt Ltd
- GPX India Pvt Ltd
- Yotta Data Services Pvt. Ltd
Key Segmentation:
By Hardware
- Servers
- Blade servers
- Rack servers
- Tower servers
- Micro servers
- Storage Systems
- Storage Area Network (SAN)
- Network-Attached Storage (NAS)
- Direct-Attached Storage (DAS)
- Cloud storage
- Power and Cooling Systems
- Power Supply
- Uninterruptible Power Supply (UPS) systems
- Generators
- Power distribution units (PDUs)
- Cooling Solutions
- Air conditioning units
- Liquid Cooling Systems
- Advanced Cooling Technologies
- Power Supply
- Racks and Enclosures
- Open frame racks
- Enclosed Racks
- Customized Enclosures
By End Users
- IT and Telecom
- Banking, Financial Services, and Insurance (BFSI)
- Healthcare
- Government
- Manufacturing
- Others
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