Indian Data Center Market: Rapid expansions in line with digital growth to boost market growth

Indian Data Center Market size was valued at USD 1.67 Billion in 2023 and the Indian Data Center Market revenue is expected to reach USD 3.56 Billion by 2030, at a CAGR of 11.4 % over the forecast period.
Indian Data Center Market Overview
A data center is a physical facility that organizations use to house their critical applications and data. A data center design is based on a network of computing and storage resources that enable the delivery of shared applications and data. The key components of a data center design include routers, switches, firewalls, storage systems, servers, and application-delivery controllers. Data centers have evolved in recent years from privately-owned, tightly controlled on-premises facilities housing traditional IT infrastructure for the exclusive use of one company, to remote facilities or networks of facilities owned by cloud service providers housing virtualized IT infrastructure for the shared use of multiple companies and customers.

The data centre industry has been largely concentrated in top 4 cities, with Mumbai, Delhi, Bengaluru and Chennai accounting for ~60% of total data centre sites and more than 75% in terms of IT load capacities. The Indian data center market had been growing rapidly, with estimation indicating continued growth over the forecast period. Factors such as the government's push for digitalization, the adoption of cloud computing, and the rise of edge computing were driving this growth. The Indian government had been implementing various initiatives to promote data center infrastructure development in the country. These initiatives aimed to support digitalization efforts across sectors such as e-commerce, healthcare, banking, and government services.To know about the Research Methodology :- Request Free Sample Report
Indian Data Center Market Dynamics
Rapid expansions in line with digital growth to boost Indian Data Center Market growth
Mumbai has the highest share of data centre capacity in India at 50% followed by Chennai at 14%, with 880 million internet users, India needs more capacity. India’s data centre industry is only continuing to grow in 2024. The country’s digital transformation efforts have rapidly accelerated, which bring plenty of benefits to its economy. As of 2021, data centres across India occupied more than 8 million sq. ft. in space, with 60% of the total data centres located in Mumbai, Chennai, Delhi and Bangalore, which significantly boosts the Indian Data Center Market growth. Mumbai emerged as the third biggest data centre market in the Asia-Pacific (APAC) region in 2023, highlighting the country’s commitment to expanding its digital infrastructure.

In line with the increased demands of new technologies such as cloud and AI services, India is currently experiencing unprecedented digital growth. With demand, comes data, as Indian Data Center companies are committing to expanding their digital infrastructures in the region to meet rising customer needs - as well as committing to the Indian Data Center market. In, January 2024 saw world-leading data centre company Digital Realty unveil its first data centre in India. The inaugural data centre is located in Chennai and has the capacity to support up to 100 megawatts of critical IT load, marking a significant expansion for the company’s data centre platform. Digital Realty is anticipating India to become one of the largest economies by 2027 and so, like other data centre enterprises, is positioning itself to deliver cutting-edge technology to satisfy customer requirements amid rising demand.

The data centre industry in India is also keen to grow in accordance with sustainable infrastructure. Colt DCS, for instance, announced in September 2023 that it was expanding into the Indian market - whilst simultaneously announcing a new hyperscale data centre to contribute to the region’s digital transformation. Part of this plan is to achieve more sustainable operations, pledging to become a net zero-carbon company by 2045. Global critical digital infrastructure company Vertiv recently announced that it is opening a new manufacturing facility in India to meet the surging demand for data centres across the APAC region, which is expected to boost the Indian Data Center Market growth. It marks the company’s third facility in India and manufacture thermal management products and solutions tailored for colocation, cloud, telecom and enterprise data centres. It is located in an India Green Building Council (IGBC) compliant park that focuses on sustainability and reducing environmental impact.

Inadequate Infrastructure to limit Indian Data Center Market growth

India's current data center capacity is inadequate to meet the rapidly expanding demand, which is expected to limit the Indian Data Center Market growth. As businesses aggressively pursue digital transformation in India, the expected surge in power consumption of data centers—is expected to reach nearly 5 gigawatts over the next six to seven years. Addressing the growing demand for data storage go hand in hand with grappling environmental concerns and the imperative need for sustainable practices.
Opportunities for Indian Data Center Market

Real Estate: Data centres have become a distinct real-estate sub-sector, with more than 500 acres of land being acquired in India in 2022 for construction of new data centres.5 In aggregate, India’s data center stock as of November 2022, spanned 10.3 million square feet, which is predicted to double up to 20 million square feet by 2025. The construction of the data centres itself is a specialized sector which spur job creation in the country across skill levels.

Manufacturing: The draft Data Centre Policy 2020 seeks to promote domestic manufacturing of data centres related products (IT as well as non-IT) by incentivizing usage of domestic hardware and equipment. It also proposes to provide incentives for global equipment manufacturers to set up manufacturing units in India, which is expected to boost the Indian Data Center Market growth. This is intended to lead to an increase in domestic value addition and reduce dependence on imported equipment for data centers.

Renewable Energy: The global and national focus on clean energy has encouraged data centre operators to pivot towards renewable energy with some striving to establish carbon neutral facilities. The growing demand for data centres together with climate change concerns necessitate that the upcoming facilities increasingly rely on renewable energy, incentivizing investment in alternative energy sources, including for captive power plants.
Indian Data Center Market Segment Analysis
Based on Industry Vertical, the market is segmented into BFSI, Government, IT & Telecom, Media, Retail, Manufacturing, and Others. IT & Telecom segment dominated the market in 2023 and is expected to hold the largest Indian Data Center Market share over the forecast period. A telecommunications data center is a facility that is owned and operated by a telecom or service provider company such as Verizon or AT&T. As they are primarily responsible for driving content delivery and facilitating mobile and cloud services, telecom data centers require very high connectivity. IT and Telecom data centers differ from Information Technology (IT) data centers as the network functions in telecom data centers are accommodated by multiple regions as a central data center and its regional/edge data centers.Based on Component, the market is segmented into Electrical, Mechanical, Security, Networking, and Others. The electrical segment dominated the market in 2023 and is expected to hold the largest Indian Data Center Market share over the forecast period. This includes power supply distribution, backup systems, and management tools to ensure that the data center operate continuously and effectively without any interruptions.
Indian Data Center Market Scope: Inquiry Before Buying



Indian Data Center Market


Report Coverage
Details


Base Year:
2023
Forecast Period:
2024-2030


Historical Data:
2018 to 2023
Market Size in 2023:
US $ 1.67 Bn.


Forecast Period 2024 to 2030 CAGR:
11.4%
Market Size in 2030:
US $ 3.56 Bn.


 Segments Covered:
by Industry Vertical
BFSI
Government
IT & Telecom
Media
Retail
Manufacturing
Others


by Component
Electrical
Mechanical
Security
Networking
Others



Leading Indian Data Center keyplayers include:
1. Sify Technologies
2. Web Werks
3. CtrlS Datacenters Ltd
4. ESDS Software Solution Limited
5. Yotta
6. Netmagic Solutions
7. AWS
8. Gpx Global Systems
9. NxtGen
10. NTT Ltd
11. Nxtra Data Limited
12. Reliance
13. STT GDC
14. Tata Communications
15. Equinix
16. RackBank Datacenters Pvt. Ltd.
17. COLT DCS
18. Vertiv
19. AdaniConneX
Frequently Asked Questions:
1. What is a data center and its key components?
Ans: A data center is a facility housing critical applications and data. Key components include routers, switches, servers, storage systems, firewalls, and application-delivery controllers.

2. Where is the majority of India's data center capacity concentrated?
Ans: Mumbai, Delhi, Bengaluru, and Chennai collectively account for around 60% of total data center sites and over 75% of IT load capacities in India.

3. What factors are driving growth in the Indian Data Center Market?
Ans: Rapid digital expansion, increased demand for cloud and AI services, and commitments by companies to expand digital infrastructure in India.

4. How are data center companies addressing sustainability concerns?
Ans: Companies like Colt DCS and Vertiv are expanding into India with sustainable infrastructure plans, aiming for net-zero carbon emissions and manufacturing energy-efficient products.

5. Which industry vertical dominates the Indian Data Center Market?
Ans: The IT & Telecom segment, driven by telecommunications companies requiring high connectivity for content delivery and cloud services.