India’s data center sector is expanding exponentially at a very high rate and accounts for 1-2% of the global market. Between 2016 and 2019, the industry recorded an annual growth of 25-30% and reached an astounding $1 billion in 2019. Experts believe that the trend will continue and the sector is expected to grow at a Compounded Annual Growth Rate (CAGR) of 8% in 2021-26.
India has emerged as one of the major players in the Asia-Pacific region, becoming the preferred destination over major hubs like Singapore. At present, the country has 80 data center facilities and talks are going on for the installation of 15 new facilities in the next 2-3 years. This paints a bright picture for established as well as new players like Nxtra, HP, Adani, Siemens and Equinix among others.
Growing reliance on digital technologies, IoT-linked devices, cloud computing, 5G rollout and data localization are major factors contributing to the industry’s growth. The government has also come up with a policy for data centers, which will provide ‘infrastructure status’ to them. This will ease the process of availing loans from domestic and international lenders, further enhancing its development.
India’s data center industry is primarily located in Mumbai, Delhi, Bengaluru and Chennai, with Mumbai and Chennai expected to contribute 73% of new additions in 2021-23. Amazon, Microsoft, Google, Azure and Flipkart are some of the major players that maintain data centers in these cities. Recently, Flipkart announced its intention to set up a third data center in Chennai. Siemens, Dell, IBM, Huawei and Lenovo are also important stakeholders in the data center industry.
Private players like Reliance Jio Infocomm, Airtel India, NTT have a considerable presence in the sector and the entrance of new players will drive up the industry’s growth. Adani Group is among the latest entrants, teaming up with EdgeConneX to develop and operate data centers across the country. Data localization has also increased the need for more data centers, paving the way for companies like Princeton DG, Bridge DC and Adani. Siemens, Cummins, L&T and Huawei will also benefit from this development as it will open new opportunities for expansion and growth.