Will India’s data centre capacity meet the nation’s growing digital needs? At over 19 GB, Indians have been the highest consumers of data per month among comparable nations, reveals report titled ‘Is India building enough to power its digital transformation?’ by Cushman & Wakefield. Despite this, India today lags in internet and smartphone penetration, reflecting the scale and extent that the data centre segment is headed towards.
According to the data, India’s Colo data centre capacity stood at 977 MW across the top seven cities in H2 of 2023, and around 258 MW out of this was built in 2023, a 105 per cent YoY growth over the installed capacity in 2022. India’s current under-construction Colo capacity addition stands at 1.03 GW for 2024-2028, with an additional 1.29 GW being planned, taking the total projected capacity to 3.29 GW by 2028. This exponential growth is propelled by a confluence of factors, including a significant increase in data consumption fueled by rising digital penetration and adoption of data-intensive technologies.
Notably, over 90 per cent of supply is concentrated in key markets including Mumbai, Chennai, Delhi NCR and Hyderabad. This report also highlights the massive under-penetration of data centres in India, and states that there is a need to significantly ramp-up investments into adding more projects in the pipeline. This increase in investment is relevant considering the increasing demand for Artificial Intelligence (AI) that is expected to further augment overall demand of DCs in India.
Vivek Dahiya, Managing Director & Head Data Centre Advisory Team, Asia Pacific, said, “The Indian data centre industry has been witnessing exponential growth over the past few years. This is fueled by rapid expansion, especially post Covid, in digital penetration levels and adoption of new-age technologies including 5G, cloud computing, IoT, Generative AI. We believe India needs close to 5 GW-6.9 GW of total installed to achieve healthier ratios. This necessitates commissioning 1.7-3.6 GW of additional projects beyond those under construction or planned.”
Furthermore, the report emphasises India’s competitive advantage in constructing Data Centres at a lower cost compared to most other countries. This is attributed to a well-established IT and digitally enabled services ecosystem, coupled with more affordable real estate. The median cost of constructing a Data Centre in H2 of 2023 in India is estimated at $6.8 million per MW of capacity, significantly lower than most APAC nations as Australia is at 9.17 million, Japan is at 12.73, Singapore is at 11.23 and China is at 6.84.
When it comes to sustainable growth of these data centres, India is among the few nations aiming to double its power generation capacity to 820 GW by 2030. The availability of ample power supply is a key criterion for the data centre industry, which is also sensitive to the quality of the power supply. Additionally, of the 820 GW expected by 2030, 61 per cent is likely expected from renewable sources, emphasising India’s high focus on sustainability. The study has also analysed the Internet Users/ MW ratio to evaluate the gap basis the sheer volume of internet users in India versus other nations. For every 1 MW of installed Colo capacity, over 670,000 internet users are being serviced. If India were to aim to bring this ratio down to China’s by 2028, India would need at least 1.7 GW of additional capacity creation over and above the current pipeline of Projects.
In mobile data consumption approach, the report compared the Petabyte(PB) / Megawatt (MW) ratio for 10 countries for the current and forecasted period using parameters such as smartphone penetration, average data usage/ consumer/ month and installed Colo capacity. India’s ratio basis this method stands at 13.2, implying that for every 1 MW of installed Colo capacity, 13.2 PB of data is being serviced in India. In contrast, China – which is the closest relevant comparison due to vast consumption and population, has a Petabyte/MW ratio at 4.5, highlighting the gap in data centre capabilities in both nations. If India were to benchmark itself against China for the year 2028 using this metric, it will need an additional 3.6 GW of installed capacity to be added, over and above existing pipeline of projects.