Driven by growth in digitalisation, rising cloud adoption and ambitious growth plans of operators, India’s data centre industry is expected to double capacity and cross the 1GW mark by 2023, a report by JLL has said.
The industry capacity is expected to double from 499MW in H1 2021 to 1008 MW by 2023. As a result of digital upgrades, strong demand for colocation/cloud facilities, which offer scalability, security, and connectivity at lower costs, has been witnessed across India, H1 2021 India Data Center Market Update report said.
“The demand momentum which picked up pace in 2020, continues to grow unabated. The Indian data centre industry witnessed 46.4 MW absorption during H1 2021 —equivalent to 90 percent of the supply addition during the period (H1 2021), indicating robust absorption growth,” said Rachit Mohan, Head, Data Center Advisory – India and co-head Office Leasing Advisory – Mumbai, JLL.
Demand was expanding due to increasing digital usage emerging from distributed workforce, growing data security concerns and business disruptions, he said.
Investors and global data centre players increased their commitment during the last six months in the Indian market by announcing joint ventures to meet expected demand.
“The demand momentum which picked up pace in 2020, continues to grow unabated. The Indian data center industry witnessed 46.4 MW absorption during H1 2021 - equivalent to 90% of supply addition during the period (H1 2021), indicating robust absorption growth. Demand has been expanding rapidly due to increasing digital usage emerging from distributed workforce, growing data security concerns and business disruptions,” said Rachit Mohan, Head, Data Center Advisory – India and co-head Office Leasing Advisory – Mumbai, JLL.
Banking and financial services are adopting hybrid options to meet digital growth. Home-grown video and gaming platforms in midst of robust user growth are also fuelling the data center industry demand. Furthermore, telecom players are formulating the roll out of 5G which is expected to drive exponential growth in data consumption, he said.
“Global investors and data center players have increased their commitment during the last six months, announcing joint ventures with operators to setup sites. Investment commitments to the tune of $3 billion highlight the growth potential, with the data center industry expected to double its capacity and cross the 1GW mark by 2023," said Samantak Das, Chief Economist and Head of Research & REIS (India), JLL.
Mumbai which currently accounts for 45% of the total capacity is expected to further add 267 MW between now and 2023. Various states have also been providing incentives for data center industry as they want to join the next leg of technological change, Das said.
Data-centre operators are adopting large land acquisition strategies to fulfil the long-term requirements of hyperscalers (large cloud players and occupiers with massive computing requirements).These operators would provide occupiers with flexibility in terms of availability zones, fiber pathways and power provisions required for large- scale expansions in less time. Players are also adopting strategic alliances by investing in new submarine cables to meet the growing demand.