India to become preferred data hub as demand for data centres soars: JM Financial

ANI April 6, 2025 132 views

India is poised to become a critical regional data hub with unprecedented digital infrastructure growth. The JM Financial report highlights a significant surge in data centre capacity, projecting 1.35GW by 2024. Structural trends like a massive internet user base and AI development are driving this expansion. The country aims to dramatically increase its data centre density, potentially attracting billions in infrastructure investments.

"These will merely serve India's domestic demand" - JM Financial Report
New Delhi, April 6: India could emerge as a preferred data hub for the entire region, as the demand for data centres are unequivocally rising, according to a report by JM Financial.

Key Points

1

India generates 20% global data but only 5.5% data centre capacity

2

Cloud infrastructure investments could reach $60 billion

3

Domestic demand driving massive data centre expansion

The report added that both structural and cyclical trends are fueling the growth of data centre demand.

A large internet user base generating a trove of data, the government's data localisation push and artificial intelligence (AI) are some of the structural tailwinds.

As per the report, India has a disproportionally low share of DCs - it generates 20 per cent of global data but only 5.5 percent of global DC capacity - and slower-than-expected capacity addition in the past has exacerbated the demand-supply mismatch, ushering in a cyclical surge in DC capacity construction.

The report further adds that its bottom-up research suggests that India's India's Colocation (colo) data centre capacity will be 1.35GW in 2024, up 38 per cent year on year.

Despite this, the report said that the country has one of the world's lowest DC densities at 14 petabyte/MW. To achieve 50 per cent of China's DC density, India needs 5GW of total capacity by 2030.

This aligns with the current announced under-construction + planned capacity of 3.3GW by2028.

At an average capex/MW of Rs 465 million, this will translate into an incremental capital outlay of USD 20 billion over the next 5 years.

The report adds that the investments on cloud infrastructure (servers, etc.) could be an additional USD 60 billion.

"While a majority of the cloud infrastructure spend will be done by hyperscalers, in our view, capex towards DC capacity (USD 20bn) alone could entail equity issuance of USD 10bn (assuming average D/E of global players). Still, these will merely serve India's domestic demand," the report added.

A data centre is a physical facility that organizations use to house their critical applications and data. A data centre's design is based on a network of computing and storage resources that enable the delivery of shared applications and data.

The key components of a data centre design include routers, switches, firewalls, storage systems, servers, and application-delivery controllers.

Reader Comments

P
Priya K.
This is exciting news for India's tech future! With our massive internet user base, it makes perfect sense to invest in local data centers. Hoping this creates lots of skilled jobs too 💻🚀
R
Rahul S.
While the growth potential is undeniable, I'm concerned about the environmental impact of all these new data centers. The report mentions $20bn investment but doesn't address sustainability measures. Hope companies prioritize green energy solutions.
A
Anjali M.
As someone working in cloud computing, this is huge! Our current infrastructure is stretched thin. More data centers mean better speeds and reliability for Indian users. The 38% YoY growth is impressive 👏
S
Sanjay P.
Interesting stats about generating 20% of global data but only having 5.5% capacity. Shows how much potential we're sitting on. Hope the government provides the right policy support to make this happen smoothly.
N
Neha T.
The AI angle is particularly exciting! More local data centers could really boost our AI research capabilities. Maybe we'll see more homegrown AI solutions in the coming years 🤖
V
Vikram D.
I appreciate the detailed breakdown of numbers in this report. The $80bn total investment figure (including cloud infra) puts things in perspective. This could be transformative for our digital economy if executed well.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

Tags:
India Data Centres Technology Infrastructure JM Financial Report Cloud Computing Digital Expansion
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