Demand created by e-commerce businesses and Smart City initiative
The widening e-commerce net and the demand created by the Smart City initiative is providing a boost to the data centre segment in the country with Mumbai, Bengaluru and NCR having the highest number of data centre operators across the country, says a report by CBRE South Asia in its report titled India Viewpoint: Is India the next frontier for the Data Center Industry.
Mumbai has 35 data centers operators and leads the data centre business in India as it is one of the global cable landing locations in the country. Cable landing stations or submarine cables are vital international telecommunication links between countries across the world. Mumbai currently has four of the ten cable landing stations in the country.
The report says India has seen the growth of DCs across all key cities, including Mumbai, Chennai, Bangalore and Hyderabad. While all cities have strong office markets, Mumbai and Chennai have attracted DC players as they offer cost arbitrage using direct submarine lines/cables. NCR too is a preferred location for data centers as some major corporates are located there.
“India holds massive potential to become the ‘next destination’ for data centers, driven by demand created by businesses. Overall, the DC market outlook looks positive on the back of the availability of land and skilled talent pool along with a huge, untapped market.
A slew of policy reforms undertaken by the Indian government has generated enthusiasm among overseas investors. Several companies have either amped up their existing DC portfolio or have made plans to do so,” says Anshuman Magazine, Chairman, India and South-East Asia, CBRE.
According to the report, several states have started developing strategies to leverage this growing interest in India. Maharashtra and Telangana were among the quickest states to tap into the growing demand for DCs by coming up with several incentive schemes for the sector. Jharkhand and Chhattisgarh too have formulated policies for the IT–ITeS segment as well as introduced a single-window clearance system to encourage investors.“The growing importance of DCs in business operations can be attributed to advances in digital technology and the rising reliance on IT strategies in the business delivery process. As a result, the Indian DC market is attracting investors because it offers many untapped opportunities.” Abhinav Joshi, Head of Research, CBRE India said.