India's data center market will need USD3.7 billion investment by 2023

New Delhi: The data center market in the country will need an investment of about USD 3.7 billion in the coming three years for fulfillment of around 6 million square feet greenfield development opportunity for the industry.

The industry is likely to add around 560 MW capacity in the coming three years and reach 1,007 MW capacity by 2023 from present 447 MW, according to a study by JLL.

As there is a growing reliance on digital connectivity in the country, demand for data centres is expected to increase quickly due to rollout of 5G mobile telephony, IoT-linked devices and data localisation.

The coastal metros of Chennai and Mumbai are likely to drive 73 percent of the sector’s total capacity addition in the coming three years. There are emerging hotspots for the data centre market like Hyderabad and Delhi NCR.

India witnessed absorption of about 102 MW in 2020. This was higher than most important market like America and Europe. There has been healthy expansion by global cloud players in India in cities like Mumbai and Pune. 

“India’s data center industry is expected to add 560 MW during 2021-23 leading to a real estate requirement of 6 mn sq ft. The supply addition will be complemented by densification of racks and servers, sustainable energy sourcing and use of indigenous resources. Rising demand is leading operators to pursue ambitious expansion plans, while some are adopting the acquisition route to enter Indian markets. Various policies and reforms brought in by the Government with an aim to turn India into a ‘Global Data Hub’ has provided necessary measures to achieve this goal,” said Samantak Das, Chief Economist and Head of Research & REIS (India), JLL.