**India’s Data Centre Growth: A Rising Hub for Digital Infrastructure**
India is poised to become a leading data centre hub, driven by several enabling factors such as enhanced cross-border connectivity, a growing number of sub-sea cable landings, and lower capital and operational costs, according to a recent report by JM Financial. The country’s strategic position between the Middle East and Southeast Asia further strengthens its potential in this sector. The demand for data centres in India is on the rise, fueled by both structural and cyclical factors.
### Key Drivers of Data Centre Demand
– **Large Internet User Base**: India has a vast population of internet users generating significant amounts of data.
– **Government Initiatives**: The push for data localization by the Indian government is a crucial structural tailwind.
– **Artificial Intelligence**: The growing influence of AI is contributing to the increasing demand for data storage and processing capabilities.
Despite the growth in India’s data centre sector, the country holds a disproportionately small share of global data centre capacity. While India generates 20% of the world’s data, it accounts for only 5.5% of global data centre capacity, leading to a significant demand-supply gap. The report highlights that India’s co-location data centre capacity is projected to reach 1.35 GW by 2024, marking a 38% increase year-on-year. However, the country’s data centre density remains among the lowest globally.
### Future Capacity Needs
– **Projected Capacity**: India requires a total capacity of 5 GW by 2030 to achieve 50% of China’s data centre density.
– **Current Developments**: There are plans for an additional 3.3 GW of capacity by 2028.
The report anticipates substantial capital investment in data centres in the coming years. While much of the cloud infrastructure spending will be driven by hyperscalers, it is estimated that capital expenditure for data centre capacity alone could reach USD 20 billion, necessitating equity issuance of USD 10 billion.
### Investment Opportunities
Given the capital-intensive nature of the data centre sector, JM Financial expects an increase in stock market listings from domestic operators over the next five years. This trend will provide investors with opportunities in the upstream value chain of the data centre industry.
**Conclusion**: As India continues to develop its data centre infrastructure, how will this impact the country’s digital economy and attract further investment?
**FAQ**:
**What is the current data centre capacity in India?**
India’s co-location data centre capacity is projected to reach 1.35 GW by 2024, with a significant increase of 38% year-on-year.