India a magnet for data centres with ready supply of power, land

Boom also powered by govt policies and soaring demand for cloud services

- Rohini Mohan

The ready availability of power and land is among the main factors that have enabled data centre capacity in India to grow by 2.5 times since 2020, as developers set up facilities across the country amid a squeeze on these resources in traditional hubs like Singapore and the United States.

With one of the largest internet user bases in the world thanks to a 1.4 billion-strong population, India's transformation into one of the fastest-growing destinations for new data centres is also powered by government policies that demand data localisation, as well as the skyrocketing domestic market for cloud services.

India itself generates 20 per cent of the world's data.

In addition, investments flowing into the country are partly motivated by geopolitics. India is seen as more attractive than China today due to tensions between Beijing and the West.

Large-capacity data centres now dot India's financial capital Mumbai, besides the southern cities of Bengaluru, Chennai and Hyderabad, which are near the country's manufacturing and information technology hubs.

Mumbai is the seventh-most popular data centre site globally, with Virginia in the US - ranked first.

As at May 2024, India had the largest data centre capacity in the Asia-Pacific region after China, at 1 gigawatt (GW). It was closely followed by Japan and Australia.

Real estate consultancy CBRE South Asia estimates that India will touch 1.4GW of capacity by the end of 2024 and at least 1.8GW by 2026.

POWER ATTRACTION

Historically, the challenge for India in providing a conducive environment for data centres was power capacity and reliability, but the country moved past that in the last decade, said Mr Sanjeev Dasgupta, chief executive of CapitaLand India Trust, a Singapore-constituted business trust focused on property in India.

What is more, many states are even showing a significant power surplus, added Mr Dasgupta.