India has emerged as the second fastest-growing market for data centers in the Asia Pacific with its operational capacity growing at 28 percent from the second half of 2023, according to Vivek Dahiya, who heads Cushman & Wakefield’s Data Centre Advisory Team for the region.
Cushman and Wakefield data showed that India's operational capacity stands at 1.4 GW with Mumbai becoming the data center (DC) capital of India. The city contributes to almost 48 percent of the nation’s operational capacity and close to 40 percent of India’s total development pipeline under construction and planned supply.
"For the $3.9-trillion economy, it is widely believed that India is quite under-supplied regarding data center capacity. Additionally, the Indian economy continues to grow at an impressive rate, resulting increased consumption and production of data," Dahiya told Moneycontrol.
A lot of recent investments in DC development in India has been mainly to catch up with the average capacities seen in similar-sized economies, with much lower populations. What gave India a competitive edge is investments made towards setting up greenfield availability regions for cloud firms. Together, they have strengthened the country's digital infrastructure.
"This new ecosystem has made investments in data centers across India a much more attractive proposition. All these points have resulted in India becoming one of the fastest-growing markets in Apac (Asia-Pacific)," Dahuya said.
According to recent market reports, India’s nominal GDP is expected to grow at 6.7 percent annually and reach $7 trillion by 2031, which will position India as the third largest economy after the US and China. In addition to this, the government’s digital initiatives are expected to make India a $1-trillion digital economy by 2028.
What makes Mumbai the DC capital of India
Mumbai has always been the leader when it comes to DC supply and based on the latest data, it is expected to continue to remain so.
Historically, good power infrastructure and multiple land points of submarine cables were two key reasons for DC firms to opt for Mumbai as a location. The presence of all key BFSI firms in Mumbai further added to the domestic demand. Over the years, most of the hyperscale firms ended up setting up their availability zones in the Mumbai region and continued to invest in expanding their capacities.
Mumbai has 12 submarine cables live, connecting directly with Europe, the Middle East, Africa, and the Asia Pacific. Five more cables will be added by 2026, further enhancing the subsea connectivity for Mumbai, making it the largest cable landing station in India.
As per the Municipal Corporation of Greater Mumbai (MCGM), Maharashtra accounts for about 13-15 percent of the national GDP and Mumbai makes up about 40 percent of the state GDP, which makes it the largest commercial hub of India.
Why Malaysia is fastest growing DC market
Data from Cushman and Wakefield shows that the Asia-Pacific data center market recorded 1.3 GW of new supply in the first six months of the year to reach an operational capacity of 11.6 GW.
Malaysia is the fastest-growing data center market in the Apac region with its operational capacity growing at 80 percent since the the second half of 2023.
“Malaysia’s recent growth is the result of a culmination of factors, including spillover from Singapore, developer speed to market and the country’s ‘ready for service’ infrastructure. Cost is also a major factor. Malaysia’s central bank rate is competitive and this, combined with a relatively affordable cost of entry and government incentives for the sector, make it an appealing location for customers from hyperscalers through new entrants to the sector,” said the report.
The influence of technological advancements such as the implementation of cloud computing, deployment of 5G networks, government's digitisation initiatives and increasing mobile and internet penetration, especially in fast-growing populations, have significantly accelerated the demand for data centers globally.
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