India’s Data Centre set for $100 Billion Investment by 2027

December 16, 2024

India’s data centre industry is transforming, with investments projected to surpass $100 billion by 2027. The sector has attracted approximately $60 billion in investment from 2019 to 2024, reflecting its appeal to global and local investors.

Key Investment Destinations

Maharashtra and Tamil Nadu have emerged as prime locations for data centres. Their robust infrastructure and supportive government policies have established them as leaders in the sector. Mumbai holds the largest share, contributing 49% of India’s total data centre capacity.

Major Cities in Data Centre Capacity

In September 2024, Mumbai, Chennai, Delhi-NCR, and Bengaluru account for around 90% of the country’s data centre stock. These cities benefit from advanced infrastructure, including cable landing stations, which facilitate services for banking, cloud computing, and media.

India’s total data centre capacity reached approximately 1,255 MW, covering 19 million square feet. This capacity is expected to expand to 1,600 MW and 24 million square feet by the end of 2024. An additional 475 MW is under construction for 2025, primarily in Mumbai and Chennai.

Occupancy Rates and Demand Drivers

The current occupancy rate for data centres hovers around 75-80%. This demand is largely driven by sectors such as technology, banking, media, and the public sector. The rise of generative AI is anticipated to further fuel the demand for data centres.

The data centre sector is expected to grow at an annual rate of 28% from 2023 to 2030. This growth could contribute approximately $400 billion to India’s economy by 2030, denoting the sector’s potential for economic development.

Government Support and Incentives

State-level incentives have played a vital role in attracting investments. Maharashtra, Tamil Nadu, and Telangana have implemented policies that classify data centres as “essential services,” providing infrastructure benefits and solidifying India’s position in global digital infrastructure.

GKToday Facts for Exams:
DC Industry: India’s data centre industry is projected to exceed $100 billion by 2027. It attracted about $60 billion in investments from 2019 to 2024, showcasing its global appeal.
Generative AI: Generative AI is set to increase demand for data centres. The sector is expected to grow annually by 28% from 2023 to 2030, contributing $400 billion to India’s economy.
Cable Landing Stations: Cable landing stations in Mumbai and Chennai enhance connectivity for data centres. They support banking, cloud computing, and media services, making these cities critical hubs.

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