Representative image of a data centre.
Credit: iStock Photo
Bengaluru: India’s data centre (DC) operational capacity is expected to more than double to 2,000-2,100 megawatts (MW) by 2026-27, up from 950 MW in 2023-24, according to a report by ratings agency ICRA released on Tuesday.
This forecast is supported by digital explosion, data localisation initiatives and will see an investment of Rs. 50,000-55,000 crore during FY25-FY27, the agency said
"Low data tariff plans, access to affordable smartphones, adoption of new technologies and growing user base of social media, e-commerce, gaming and OTT platforms are some of the key triggers for data explosion,” said Anupama Reddy, Vice-President and Co-Group Head, Corporate Ratings, ICRA.
Reddy added that artificial intelligence (AI) led demand, which is expected to increase multi-fold in the next 3-5 years, presents significant opportunities.
Due to environmental concerns, the report estimates an increase in consumption of green power by DCs to 20-25 per cent of total power consumption by FY28 from below 5 per cent currently and expects the revenue of data centres to rise by 23-25 per cent year-on-year in FY25.
Around 95 per cent of the existing capacity is in six cities in India with Mumbai (54 per cent ) and Chennai (16 per cent) leading the race due to their advantage in the form of the undersea cable ecosystem, which offers best latencies or the amount of time it takes for a data to travel from one place to another.
According to the report, the DC capacity in India is dominated by a few players like NTT Global Data Centers, STT Global Data Centers, CtrlS Data Centres, Sify Technologies and Nxtra Data Limited, which had a share of 85 per cent in the operational capacity as of March 2024.
However, considering the strong demand for data centres in the country, many new developers like Yotta, Digital Connexion, Lumina CloudInfra, CapitaLand, Digital Edge, etc, have entered the industry with massive investments.