India has the potential to become a global data centre hub due to its low construction, land and power costs compared to other countries, coupled with a well-established IT and digitally enabled services ecosystem.
According to Cushman & Wakefield, the median cost of constructing a data centre in India is estimated at $6.8 million per MW of capacity, significantly lower than most APAC nations—Australia is at $9.17 million, Japan is at $12 million.
The report said that three crucial undersea data cable projects landing at Mumbai could be completed in 2025, thereby helping to position India’s financial capital as a regional data centre hub.
“We have been witnessing a consistent rise in annual capacity addition, much in line with the surge seen in data consumption in the country. For 2025, given the number of greenfield projects under construction, the momentum in capacity addition looks intact. We foresee next year adding 250 MW of Colo IT load, which would then bring the pan-India installed capacity to 1.46 GW by the end of 2025,” the company’s spokesperson said.
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Beyond the current speed of delivery of colocation data centre projects, the potential for growth remains very high in India. Over the next five years, India will need anywhere between 1.7 GW and 3.6 GW of additional capacity, over and above the capacity that’s been built or planned currently.India’s power generation was at 442 GW as of FY24, up from 416 MW in the previous fiscal year. As of October 24, it rose to 454 GW, with capacity addition expected this fiscal year in line with last year of 25 GW.
“There is a lot of focus from the government to ride the digital transformation wave, and the importance given for the creation of infrastructure through power and data centres is immense, like we have seen in recent finance budgets as well,” the company said. “A sustained increase in power generation capacity will help in data centre growth significantly, given that new facilities are coming up with world-class specifications and are designed to be AI-ready, which is likely to consume more power.”
Experts said that considering the increasing demand for artificial intelligence (AI) that is expected, it will further augment overall demand of DCs in India.
India is among the few nations aiming to double its power generation capacity to 820 GW by 2030, a move that will benefit power-consuming industries like data centres. The availability of ample power supply is a key criterion for the data centre industry, which is also sensitive to the quality of the power supply.
Additionally, of the 820 GW expected by 2030, a dominant 61% is likely expected from renewable sources, emphasising India’s high focus on sustainability.
