Six-fold increase in data centre capacities expected in the next six years: ICRA

To cater to the increasing demand, Indian corporates and foreign investors in the country are investing in data centres

Data localisation and data explosion are paving the way for a data centre (DC) revolution in India, and a six-fold increase in their capacities is expected in the next six years, according to credit rating agency ICRA.

To cater to the increasing demand, Indian corporates like the Hiranandani Group, the Adani Group, Reliance Industries, foreign investors Blackstone, CapitaLand, Princeton Digital Group, captive consumers like Amazon and Microsoft have started investing massively in DCs. Existing players like NTT, CtrlS, Nxtra and STT India are also expanding their capacities.

Overall, 4,900 to 5,000 MW of capacity involving investments of approximately Rs 1.50 lakh crore are likely to be added in the next six years.

“The key triggers for digital explosion in India are the increasing internet and mobile penetration, the government’s thrust on e-governance/digital India, adoption of new technologies (cloud computing, IoT, 5G etc), growing user base for social media, gaming, e-commerce and OTT platforms,” According to ICRA VP of Corporate Ratings Anupama Reddy said.

"This, coupled with favourable regulatory policies viz. the draft Digital Data Protection Bill 2022, providing infrastructure status to data centres, special incentives from Central and state governments like land at subsidised cost, power subsidies, exemptions on stamp duty, discounts on usage of renewable energy and procurement of IT components made locally, and other concessions are expected to boost DC investments in the country,” Reddy said in a press release.

Presence of landing stations, fibre connectivity, uninterrupted power supply, proximity to tenant’s headquarters and high score on disaster proofing are some of the key parameters a DC operator would look for in a location, Reddy added.

"Mumbai and Chennai have maximum landing stations, with the former being the preferred location for a DC operator. Chennai’s reputation took a dent due to the floods of 2017 and 2018. The other key emerging locations are Hyderabad and Pune, wherein some of the large hyper scalers are setting up huge DCs closer to their operation bases in India,” Reddy added.