Data center investments in India to continue till 2023

The capacity of the data centre industry is expected to double by 2023 to over 1,000 MW to meet the rising demand amid sharp growth in digitalisation, according to property consultant JLL. The industry's capacity is expected to double from 499 MW in January-June 2021 to 1,008 MW by 2023. The acceleration of digitalisation has forced enterprises to scale up their IT infrastructure. The consultant said a strong demand for co-location/cloud facilities, which offers scalability, security, and connectivity at lower costs, has been witnessed across India. The research reveals that Investors and global data centre players have increased their commitment during the last six months in the India market by announcing joint ventures to meet expected demand.

Essentially, the demand has been growing rapidly on increased digital usage emerging from distributed workforce, growing data security concerns and business disruptions. The demand comes from the sectors of BFSI as they are adopting hybrid options to meet digital growth. Secondly, Home-grown video and gaming platforms in midst of robust user growth are also fuelling the data centre industry demand. Furthermore, telecom players are formulating the rollout of 5G which is expected to drive exponential growth in data consumption.

The real twist was witnessed from the pause of Data Centre expansion in Singapore. Singapore's Ministry of Trade and Industry (MTI)data centres accounted for about seven per cent of total power consumption in the city-state in 2020. This is also detrimental to the environment. Singapore's MTI, therefore, announced a halt to approvals to build new data centres in 2020 until the end of 2021 while it reviewed how it can strike a balance between environmental sustainability and supporting business needs. It comes as an opportunity for the next growth and expansion of data centres in the country.

There are reports that global companies including Microsoft, NTT and Singapore's ST Telemedia are building data centres in Noida. Secondly, Mumbai region is also observed as the next destination of investment into Data centres. In March, Singapore headquartered Princeton Digital Group (PDG) announced that it was planning to build its first data centre in India which will be on a greenfield campus in Navi Mumbai.

In June, ST Telemedia announced that its subsidiary ST Telemedia Global Data Centres India (STT GDC India) has started construction on its greenfield sited data centre facility with an investment of $150 million facilities and in July, anther Singapore's largest private property developer from Singapore, CapitaLand announced its first data centre investment of $160 million in India to develop and operate a complex also in Navi Mumbai.