The Data Centre (DC) industry in India is on the verge of a transformative phase, poised to add an impressive 791 MW of capacity by 2026, according to a recent report by JLL India. This anticipated expansion is projected to require approximately 10 million sq. ft. of real estate space and is expected to attract a staggering $5.7 billion in investments. The driving force behind this burgeoning demand is the increasing adoption of Artificial Intelligence (AI) across various sectors. As AI utilisation escalates, the need for data centres in India is forecasted to range between 650-800 MW during the 2024-26 period, signalling a robust growth trajectory for the sector.
A landmark development came in 2023 when the Indian government granted infrastructure status to data centres. This strategic initiative aims to facilitate easier access to institutional credit at reduced interest rates, making it more attractive for investors. Such a move is expected to catalyse the development and expansion of data centres nationwide, further solidifying India’s position in the global digital economy. This governmental support, combined with a favourable business climate, is likely to enhance investor confidence and drive long-term growth within the sector.
The data centre industry has emerged as one of the top three preferred alternative asset classes for investors in the Asia-Pacific (APAC) region, as highlighted by a recent CBRE report. This burgeoning sector has witnessed significant investments from global operators, real estate developers, and private equity firms eager to seize opportunities in India’s expanding data centre market. Between 2018 and 2023, India attracted over $40 billion in investment commitments from both global and domestic investors, underscoring the growing interest in this sector. With the convergence of technology and infrastructure, the data centre landscape in India is set to flourish, presenting a wealth of opportunities for stakeholders.
Sustainability is an increasingly vital consideration as the data centre industry evolves. The environmental impact of data centres, particularly regarding energy consumption and carbon emissions, has prompted the need for eco-friendly designs and operations. By adopting renewable energy sources, implementing energy-efficient cooling systems, and focusing on sustainable building practices, data centres can significantly reduce their carbon footprint. This shift towards sustainability not only aligns with global environmental goals but also meets the growing consumer demand for responsible business practices. As India invests in this critical infrastructure, the emphasis on sustainable operations will be essential to ensuring a greener future for urban development, benefiting both the environment and the economy.
