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The study estimates that data center capacity will double to around 1,500 MW by 2025 from the current 770 MW.
This has prompted large conglomerates, such as Amazon Web Services, Adani Group, Oracle, Reliance Industries-Microsoft, Iotta Infrastructure and Blackstone Lumina CloudInfra, to build data centers in major cities such as Mumbai and Chennai.
“A large amount of data center demand in India is still being outsourced. With the data localization rules coming into force, this trend is already reversing,” said Sanjeev Dasgupta, chief executive officer of trust manager Ascendas India Trust. “We are seeing huge demand from the enterprise segment, retail sector and BFSI.” India is also becoming a hub for data centers across Asia Pacific.
Faced with the challenge of expanding into other developed markets such as Singapore, India is pursuing steady growth linked to expansion directly linked to end-user spending.
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Edge data centers, along with the launch of 5G, will create additional opportunities to expand the data center footprint across the country.
“Edge data centers are the next big opportunity in India as these data centers support a sustainable data center transition through a smaller footprint and lower energy consumption,” said Ramesh Nair, Chief Executive Officer, India and Managing Director, Market Development, Asia, Colliers.
Currently, Mumbai accounts for the largest share of data centers at 49%, which benefits from the presence of a landing station and submarine cable connectivity.
Delhi-NCR has about 17% of the total data center capacity, followed by Bengaluru.
“The exponential growth of data centers needs to be supported by significant investments in energy infrastructure, most importantly in sustainable energy infrastructure,” said Sanjay Bhutani, senior vice president of AdaniConneX.
“We cannot imagine one without the other.” With this long-term perspective in mind, we are building an integrated infrastructure that offers a long-term energy guarantee to hyperscale and business users,” Butani said. “We are scaling this solution across India with hyperscale to hyperlocal nodes and a combined capacity of 1 GV.
The segment also attracts large funds, such as Brookfield and Blackstone.
As of 2020, data centers have received a total investment of $10 billion, with increased collaboration between developers and global operators.
“Data centers are capital intensive, and investors with a long-term horizon are exploring this asset class.” Although real estate costs are only around 25%, there are ample opportunities for developers and investors in this space,” Bhutani added.
Blackstone recently set up Lumina CloudInfra, a wholly-owned platform, to invest in data centers across Asia, starting with India.
“Companies increasingly need high-density, secure and flexible infrastructure to improve business operations, which we have the scale and expertise to support at Lumina CloudInfra,” said Anil Reddy, Chief Executive Officer of Lumina CloudInfra. “In addition, the Indian government has provided exceptional support in this sector, encouraging policies and talent to build India into a global center of technology and innovation.”
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