India's Data Centre (DC) Industry is all set for exponential growth, driven primarily by artificial intelligence (AI) and the nationwide rollout of 5G technology. According to JLL India, the DC industry is expected to add a staggering 604 MW capacity in the next two and a half years (H2 2024-2026). The growth is a testament to India's emergence as a global hub for AI innovation and data centre development.

“India is rapidly establishing itself as a global centre for AI innovation and data centre growth. Hyperscalers are increasingly pursuing self-build projects in major data centre hubs, while operators are planning new campuses powered by 400 kVA lines to support AI clusters. Navi Mumbai, a satellite city near Mumbai, is emerging as a key data centre location, with potential demand expected to reach 800 MW in next few years. The push for AI-ready infrastructure, combined with the transformative influence of 5G, is revolutionizing India’s digital ecosystem and positioning the country as a leader in technological advancements,” said Rachit Mohan, APAC Lead - Data Centre Leasing, JLL.

In the first half of 2024 (January June), the DC industry already reached a capacity of 917 MW with an impressive 873 MW occupancy, indicating extremely tight market conditions.

Over the past four and half years (2019-H1 2024), the sector has expanded 2.5 times, growing at a remarkable 24% CAGR. The growth is expected to be fuelled further by significant government initiatives, including the approval of a USD 1.24 billion investment in AI infrastructure. Additionally, 5G network coverage is estimated to have reached over 90% of India's population by the end of 2023.

Dr. Samantak Das, Chief Economist and Head of Research & REIS, India, JLL said, “The future expansion of DC industry till 2026 will require approximately 7.3 million sq. ft of real estate and a capital investment of USD 3.8 billion. Mumbai is expected to maintain its market leadership, while we anticipate significant growth in Chennai and other regions. This expansion is not only driving demand for specialized skills but also creating opportunities across backward-linked industries.”

As India positions itself at the forefront of technological advancement, the data centre industry's growth is set to have far-reaching implications for the country's digital infrastructure and economy. The industry's expansion is not only creating new job opportunities but also driving innovation across various sectors, solidifying India's position as a global tech powerhouse.