India’s edge data centre capacity currently accounts for around 5 percent of the country’s total, but excluding captive usage by one major operator, it falls to about 1 percent, indicating substantial room for expansion in the sector
India’s edge data centre capacity is set to triple by 2027, reaching an estimated 200-210 Megawatts (MW), up from 60-70 MW in 2024, driven by rapid growth in emerging technologies, according to rating agency ICRA.
Globally, total data centre capacity stands at around 50 Gigawatts (GW) as of December 2024, with edge data centres making up roughly 10 percent of this figure. The United States dominates the edge data centre market, holding over 44 percent of worldwide capacity, followed by Europe, the Middle East, and Africa (EMEA) at 32 percent, and the Asia Pacific (APAC) region at 24 percent.
Edge data centres differ from traditional ones by being smaller, decentralized facilities located close to users and devices. This proximity enables real-time data processing with minimal latency, improving responsiveness for applications requiring immediate feedback.
India is still in the early stages of adopting edge data centres, with their capacity representing approximately 5 percent of the country’s total data centre capacity. Excluding captive edge capacity used by one major operator, this figure drops to about 1 percent, highlighting significant growth potential.
Complementary roles, growth challenges
Anupama Reddy, Vice President and Co-Group Head of Corporate Ratings at Icra, emphasized the complementary role of traditional and edge data centres in India’s digital infrastructure. “Traditional data centres will continue to support large-scale computing, AI, and cloud workloads, while edge data centres will enable real-time processing and localized services. Together, they are expected to operate in a hub-and-spoke model, enhancing efficiency across sectors such as healthcare, banking, agriculture, defence, and manufacturing,” she said.
However, the expansion of edge data centres faces challenges. These include security concerns due to remote deployments—often in tier II and III cities—rapid technological shifts risking obsolescence, a shortage of skilled personnel in remote locations, and interoperability issues with existing data centres.
Reddy also noted that edge data centres typically command higher rental rates than traditional centres because they primarily serve retail customers, while traditional centres focus on enterprise clients. Despite higher capital expenditure per MW, this is expected to be offset by increased rental income. Established players, including telecom operators and firms like RailTel, are poised to lead India’s edge data centre growth.
