India’s data centre capacity to more than double by FY27: Crisil report

The Indian data centre industry's capacity is projected to more than double to 2-2.3 GW by FY27, driven by the country's increasing digitalisation, according to Crisil Ratings. The growing shift towards cloud storage by enterprises is a key factor, along with the rise of Generative Artificial Intelligence (GenAI), which demands higher computational power and lower latency than traditional cloud computing. This shift is expected to further stimulate data centre demand in India over the medium term. Data localisation initiatives and state incentives are also expected to attract further investment in the sector.

Two factors primarily fuel the demand for data centres. First, businesses are rapidly transitioning to digital platforms, including cloud services, a trend accelerated by the Covid-19 pandemic. Second, the increased availability of high-speed data has led to greater internet usage, including social media, OTT platforms, and digital payments. Over the last five fiscals, mobile data traffic has grown at a compound annual growth rate (CAGR) of 25%, reaching 24 GB per month by the end of FY24, with expectations to rise to 33-35 GB by FY26. To meet this growing demand, an investment of US$ 6.46-7.64 billion (Rs. 55,000-65,000 crore) is required over the next three fiscals, primarily in land, buildings, power equipment, and cooling solutions. This expansion is driven by existing players and new entrants, with substantial demand from hyperscalers and large-scale data centres that provide cloud computing and data solutions.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.