India’s data centre industry is witnessing unprecedented growth, with demand nearly doubling in the first half of 2024, reaching approximately 200 megawatts (MW). A recent analysis highlights a robust expansion in IT infrastructure across pivotal micromarkets, reflecting a significant shift in how businesses utilise data services.
The surge is marked by an addition of around 71 MW of IT capacity, bringing the total operational stock to 942 MW—a striking 21% increase compared to the 778 MW logged in the same period last year. This leap in capacity is predominantly driven by hyperscalers, as well as the Banking, Financial Services, and Insurance (BFSI) sectors, IT and ITeS industries, and various service sectors that increasingly rely on data centre operators for colocation and ancillary services. Mumbai continues to dominate the landscape, commanding a remarkable 54.9% of the total capacity. Following Mumbai, Chennai accounts for 12.3%, Bengaluru 8.2%, and Pune 7.2%. Notably, hyperscalers contribute 22% of the total capacity, with enterprises making up 10%, while the remaining 68% is shared between these segments, illustrating a diverse usage pattern within the industry. The rising inclination towards colocation services can be attributed to escalating capital and operational expenditures, uncertainties surrounding future demand, and the necessity for scalability. The high costs associated with advanced security systems and high-performance GPUs, coupled with soaring real estate prices, are prompting businesses to lean more towards enterprise colocation solutions.
Looking ahead, projections from industry analysts suggest a robust demand trajectory, estimating a requirement of 400 MW by the end of 2024, against an anticipated supply of 350 MW. Operators are diversifying their offerings beyond conventional colocation, incorporating networking, cloud solutions, specialised hardware like GPUs, and other managed services. This growth is largely propelled by surging internet usage, the rollout of 5G technology, and the pressing need for ultra-low latency—factors that are further exacerbated by the rising adoption of AI and IoT technologies. From a sustainability perspective, this boom in data centre demand is not without its challenges. The substantial energy consumption required to support these facilities raises questions about carbon footprints and the ecological impact of expansion. Industry stakeholders are increasingly recognising the importance of incorporating green technologies and renewable energy sources to mitigate environmental impacts. Sustainable practices, such as energy-efficient cooling systems and solar-powered operations, are becoming essential as the sector strives to balance growth with environmental responsibility. This evolving landscape not only reflects technological advancements but also emphasises a collective responsibility towards creating a sustainable future, marking a transformative phase in India’s digital economy.
