India Needs 1.7-3.6 GW Data Center Capacity by 2028: Report

New Delhi, June 26 (PTI) India will require an additional 1.7-3.6 GW data centre capacity by 2028, over and above 2.32 GW capacity already under construction and planning stage, to meet growing demand, according to Cushman & Wakefield.

Real estate consultant Cushman & Wakefield on Wednesday released a report 'Is India Building Enough to Power its Digital Transformation?'

The report conservatively estimates the potential data centre capacity India will require to align with other major economies. There will be a requirement of an additional 1.7-3.6 GW data centre capacity, over and above the planned development of 2.32 GW Colo capacity.

At the end of 2023, India's installed colocation (Colo) data centre capacity stood at 977 MW (IT load). About 258 MW came in 2023 across its top seven Indian cities.

This is a formidable number and surpassed the capacity addition in 2022, which stood at 126 MW, the report said.

The consultant noted that at over 19GB, Indians have been the highest consumers of data per month among comparable nations.

Despite this, India today lags in internet and smartphone penetration, reflecting the scale and extent that the data centre segment is headed towards.

India's current under-construction Colo capacity addition stands at 1.03 GW for 2024-2028, with an additional 1.29 GW being planned, taking the total projected capacity to 3.29 GW by 2028.

This exponential growth is propelled by a confluence of factors, including a significant increase in data consumption fueled by rising digital penetration and adoption of data-intensive technologies, the consultant said.

Notably, more than 90 per cent of this supply is concentrated in key markets including Mumbai (which is a clear leader), Chennai, Delhi NCR and Hyderabad - which is fast emerging as the new data centre hub in India.

The report highlighted the massive under-penetration of data centres in India, and that there is a need to significantly ramp up investments into adding more projects in the pipeline.

This increase in investment is also relevant considering the increasing demand for Artificial Intelligence (AI) that is expected to further augment overall demand of data centres in India.

The report has employed two distinct approaches to assess India's potential data centre capacity.

By comparing key metrics (mobile data consumption and number of internet users) with other nations, it highlights that India is far from reaching an oversupply situation, rather it is grossly under-penetrated, the consultant said.

Vivek Dahiya, Managing Director & Head Data Centre Advisory Team, Asia Pacific added, "The Indian data centre industry has been witnessing exponential growth over the past few years. This is fueled by rapid expansion especially post-Covid, in digital penetration levels and adoption of new-age technologies including 5G, cloud computing, IoT, and Generative AI."

This report, he said, has highlighted India's untapped potential in the data centre space.

"We believe India needs close to 5 GW-6.9 GW of total installed to achieve healthier ratios. This necessitates commissioning 1.7-3.6 GW of additional projects beyond those under construction or planned," Dahiya said.

He anticipated this growth trajectory to continue and expected both existing players to expand and new entrants to join the market in the near-to-medium term.