India requires additional data center capacity of 1.7-3.6 GW by 2028

New Delhi: India will need an additional 1.7-3.6 GW of data center capacity by 2028, on top of the 2.32 GW of capacity already under construction and planning, to meet growing demand, according to Cushman & Wakefield.

Real estate consultancy Cushman & Wakefield on Wednesday released a report ‘Is India Building Enough to Fuel Its Digital Transformation?’ The report conservatively estimates the potential data center capacity India will need to catch up with other major economies. An additional 1.7-3.6 GW of data center capacity will be required, on top of Colo’s planned 2.32 GW capacity development. At the end of 2023, the installed capacity of data center colocation (Colo) in India was 977 MW (IT load). About 258 MW came in 2023 in top seven Indian cities. This is a formidable number and exceeded the capacity added in 2022, which was 126 MW, the report said.

The consultant noted that at more than 19GB, Indians were the highest consumers of data per month among comparable nations. Despite this, India today lags behind in terms of internet and smartphone penetration, reflecting the scale and scale towards which the data center segment is moving. India’s current under-construction Colo capacity addition is 1.03 GW for 2024-2028, with another 1.29 GW planned, bringing the total projected capacity to 3.29 GW by 2028. This exponential growth is driven by a confluence of factors, including significant growth in data consumption fueled by increasing digital penetration and the adoption of data-intensive technologies, the consultant said. Notably, more than 90% of this supply is concentrated in key markets, including Mumbai (which is a clear leader), Chennai, Delhi NCR and Hyderabad – which is rapidly emerging as India’s new data center. The report highlighted the massive under-penetration of data centers in India and the need for significant increase in investment to add more projects in the pipeline. This increase in investment is also relevant given the growing demand for artificial intelligence (AI), which is expected to further increase the global demand for data centers in India.

The report used two distinct approaches to assess the potential capacity of data centers in India. Comparing key metrics (mobile data consumption and number of internet users) with other nations highlights that India is far from over-supplied, rather it is severely under-penetrated, the consultant said. Vivek Dahiya, Managing Director & Head Data Center Advisory Team, Asia Pacific added, “The Indian data center industry has seen exponential growth over the past few years. This is fueled by the rapid expansion, especially post-Covid, in levels of digital penetration and adoption. of new technologies including 5G, cloud computing, IoT and generative AI.”