Buoyed by the growing demand, over 45 data centres spanning around 13 million square feet and 1,015 megawatt of IT capacity are planned to come up in India by 2025-end, reveals the ANAROCK-Binswanger report titled ‘Under the Lens: India’s Data Centre Explosion.’

In terms of IT capacity, over 69% of this planned new supply will come up in Mumbai and Chennai, with 51% in Mumbai alone. Currently, there are 138 data centres across India spanning around 11 million square feet and having 737 MW of IT capacity. At least 57% of this current IT capacity is in Mumbai and Chennai collectively.

With the addition of this new planned supply, India is expected to host 183 data centres with around 24 million square feet and at least 1,752 MW of total IT Capacity by 2025-end.

The current size of the Indian data centre industry is approximately $5.6 billion, as per the report.

This comes after the unprecedented crisis created by the Covid-19 outbreak has propelled the data centre business forward, providing an unexpected tailwind. The lockdown and subsequent restrictions threw life and business out of gear. However, this very black swan event became a massive catalyst for digital adoption across the country.

Technology adoption and digitisation across the sectors were fast-tracked globally and India also leapfrogged at least a decade in the last couple of years, the report says.

India accounts for 14% of the world’s mobile subscriptions and 15% of the total mobile data traffic. This is likely to increase to 17% by 2027 as the Indian economy is poised to grow despite a global slowdown and other economic headwinds.

The data consumption per user per month has increased from 1.24 GB1 in Q2 2017 to 14.1 GB1 in Q2 2021 and 17 GB2 in 2022. The average traffic is estimated to rise to 50 GB3 per month per smartphone in 2027 (almost on par with estimates for China).

“The country’s total estimated data centre demand is expected to be 2,100 MW as of FY 2025, with a mix between hyperscalers and enterprises – 35:65 (excluding self-owned hyperscaler capacity),” says Devi Shankar, president - Industrial & Logistics and Data Centres, ANAROCK Capital.

Meanwhile, there is additional potential of nearly 2,688 MW of future unplanned supply in India, the report says. Land for this supply has been locked in by DC operators, but the projects will likely be planned based on actual demand or outcome of earlier planned phases.

“While this represents land banking for providing scalability for future expansion to customers, this capacity must be judiciously released into the market to ensure price stability. Around 78% of this unplanned IT capacity is to be concentrated in Mumbai and Hyderabad,” adds Shankar.

As per the survey, around 30% companies are looking at hybrid (cloud and data centre) hosting services for data management. About 72% of professionals have witnessed data surges in their organisations post-Covid-19.

“Companies are really starting to relook where they are putting their operations globally, where they would like to relocate and where do they want to manufacture, distribute and set up their database and technology facilities. Data centres are currently a fulcrum for a lot of the decision-making, especially in Asia Pacific and in India,” says Jeff Binwanger, managing partner, Binswanger.

India ranked third in the world in data breaches in 2021. The data protection and privacy regulations in India, which is critical to ensure adequate data protection mechanisms, has been in draft stage for the last five years with multiple deliberations. Earlier this month, the government decided to withdraw the Data Protection Bill, 2021 altogether and formulate a new privacy law from scratch.

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