Published On:May 25 2024
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Indian Data Centre Industry Valued at $5.7 Billion, to Add 791 MW Capacity by 2026

The Indian Data Centre (DC) industry is poised for significant expansion, with 791 MW of additional capacity expected by 2026, according to a report by real estate and investment management firm JLL. This growth will necessitate 10 million square feet of space and is projected to attract $5.7 billion in investments.

The surge in demand is driven by the increasing use of Artificial Intelligence (AI), which is expected to push the need for Indian data centres to between 650 and 800 MW from 2024 to 2026. Data centres, which centralize IT operations and equipment for data storage, processing, and transfer, are crucial for managing this growing demand.

Cloud Service Providers (CSPs), which offer IT infrastructure for data storage and computing power over the Internet, are adjusting their requirements to accommodate AI-driven demand. These providers have announced increased investments to support AI-led growth. "The exponential growth in processing power and data volumes, driven by AI, necessitates the development of new data centres capable of meeting energy, processing, and cooling needs," said Rachit Mohan, Head of Data Centre Advisory, India, JLL. He added that the anticipated expansion of AI disciplines will further boost demand for data centres, enhancing their capacity and capabilities.

The report highlights a 12 percent increase in data centre absorption, rising to 81 MW in the latter half of 2023 from 72 MW in the same period the previous year. This uptick is attributed to the resurgence of CSPs following a slowdown in early 2023. In Mumbai, absorption nearly doubled as CSPs ramped up their activities.

During the second half of 2023, there was a reduced supply addition of 75 MW, as the available supply from the first half was utilized to meet demand, leading to a tighter vacancy level of 5.5 percent. The Indian data centre sector has grown from 350 MW in 2019 to 854 MW in 2023, reflecting the upward trend in digital usage.


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