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The global data center colocation market is expected to more than triple over the next ten years, with a forecasted value of USD 310.26 billion by 2032. A significant growth area are data centers in India, as the Asia Pacific region is expected to account for half of the global colocation market by 2025.
To better understand the current landscape for data centers in India, we consulted our partner Iron Mountain Data Centers (IMDC).
The Current Landscape of Data Centers in India
According to IMDC, over the past three years, data centers in India have grown in capacity by over 50% — and the market keeps growing. The market is expected to double by the end of 2025, from 600 MW in 2022 to between 1500 and 1700 MW. This rapid expansion illustrates how more carriers are looking towards the Asian Pacific market for growth opportunities with colocation.
Previously, reliability was one of the primary concerns for data centers in India. However, thanks to continued improvements to infrastructure, 800 million internet users, and more and more businesses moving workloads to the cloud, India is currently one of the fastest-growing digital markets in the world.
Most data centers are in and around India’s hugely populous leading cities, with some areas emerging as critical hubs. While Mumbai is known as an international hub for business, Bengaluru, Chennai, Hyderabad, Kolkata, Pune, and the Delhi National Capital Region are some of the most digitally developed regions in terms of a mix of data centers, connectivity and cloud availability.
Currently, there are nearly 60 data centers from 18 colocation providers in India, with the most significant clusters in Mumbai, Navi Mumbai, Pune, Bangalore, Hyderabad and Chennai, followed by New Delhi/Noida and Kolkata.
Opportunities for Data Centers in India
The Indian government is committed to digital transformation and a rapidly growing economy. As a result, setting up data centers in India has become an appealing opportunity for global businesses and investors.
Add a workforce that includes skilled software and tech resources, and it’s easy to understand why this market is seeing a surge.
Here are five key reasons that make the data center market in India so attractive.
#1. Digital India
The government of India created the Digital India initiative to create a ‘digitally empowered society and knowledge economy’. A significant aspect of the program includes digitizing public services in the public finance, health, and education sectors, and achieving this will require a much more robust technical infrastructure.
From IoT and data analytics to reliable data centers, the need for increased capacity represents an opportunity for providers to enter or expand the Indian market.
#2. Government Support
With a focus on driving digital growth, many policies, including classifying data centers as infrastructure assets, have been implemented to support those within the market. Goods and Services Tax refunds, stamp duty exemptions, and land cost subsidies are all offered as financial incentives for data center construction.
In many cases, the costs associated with data center construction are already lower than in other markets, making these incentives even more appealing.
#3. Data Protection
The Digital Personal Data Protection Act (DPDP), modeled after the EU’s GDPR, was implemented in 2023. Even though the rules about keeping data within the country were changed, financial data still needs to stay in India, and rules for social media are still being worked out.
The new data accountability standards in the DPDP are expected to improve data center service agreements. The Act also plans to set up a Data Protection Board of India to enforce these rules.
#4. World-Class Connectivity
The Indian government is also heavily investing in improving internet connectivity. In mid-2023, they announced an additional $13 billion investment to expand the country’s fiber-optic network on top of the $8.3 billion already spent. This will further enhance the digital infrastructure between key cities like Chennai, Delhi, Mumbai and Hyderabad.
India currently has 17 major undersea internet cables, with more being added over time.
#5. Top Tech Workforce
It’s no secret that India boasts an IT workforce that is highly skilled, tech-literate, and affordable.
With over five million people working in the IT and business process management industry and an impressive 55% share of the global market for IT services, the added value the workforce can bring to data centers in India is immense.
India: The Next Hub for Data Center Innovation
The data center market in India is incredibly promising. The government is championing an existing data infrastructure and a digital economy.
Working with data centers in India offers a way to take advantage of the skilled workforce, manufacturing capabilities, sizeable domestic market, and export potential. For companies in other regions across the globe, the possibility of diversifying supply chains adds to its appeal.
Bridgepointe is the leader in the data center and cloud advisory market, having completed over 1,200 successful projects for our clients. To ensure you get the best solution for your next data center project, download this guide, which shares the ten critical considerations for selecting a data center.
