India’s Data Centre Industry Hits $10 Billion Amid Rapid Expansion

India’s data centre industry has surged to a $10 billion valuation, generating approximately $1.2 billion in revenue for the financial year 2023–24 (FY24), according to a report by Anarock Capital. The sector is primarily led by four major operators, who account for 78% of the total revenue.

Despite a slowdown in operating profit growth after 2020, the industry is poised for a 50–55% increase as new projects reach operational stability. Investment in the sector remains strong, with $4.2 billion deployed as of March 2024, comprising $2.6 billion in equity and $2.4 billion in debt. Over the past decade, private equity, joint ventures, and acquisitions have driven $6.5 billion in investments, expanding India’s total data centre capacity by 139% to 1.4 gigawatts (GW) in 2024 from 590 megawatts (MW) in 2019.

What’s Driving India’s Data Centre Boom?

The rapid growth of internet penetration, which increased from 33.4% in 2019 to 55.2% in 2024, has been a major factor. Additionally, data consumption per user nearly doubled to 21.1 GB per month, while mobile data traffic per smartphone rose to 32 GB, driving demand for advanced data centres.

Key Data Centre Hubs in India

The industry is concentrated in major cities, with Mumbai and Chennai together accounting for 70% of India’s IT power capacity. Mumbai alone contributes 49%, with its capacity expanding by 92% between 2022 and 2024, while Chennai saw a staggering 340% growth. Other important markets include Noida (9%), Bengaluru (8%), Pune (5%), and Hyderabad (4%), with an overall occupancy rate of 76%, reflecting strong market absorption.

AI and Green Data Centres: The Future of Growth

With the rise of artificial intelligence (AI), demand for high-performance data centres is set to increase. Future facilities will incorporate liquid cooling systems, support higher rack densities, and accommodate heavier floor loads for advanced computing. Sustainability will also be a key focus, with energy-efficient designs and renewable energy sources playing a crucial role.

Additionally, edge data centres are emerging in tier-2 and tier-3 cities like Jaipur, Ahmedabad, and Bhubaneswar, bringing computational power closer to users for AI-driven applications.

Source: Business Standard