Increasing Cloud business attributes to the growth of Data Centre business in India

India's progress towards becoming a true digital economy, backed by progressive government policies, is encouraging domestic and global data centre operators to make huge investments in the country. The market is likely to experience a rapid growth in the forecast period on account of increased investment in big data analytics, artificial intelligence combined with rollout of 5G technology across the country.

Further, cloud services are being embraced by businesses in a variety of industries, including banking, financial services, insurance, IT & telecommunications, energy & utilities, media & entertainment, and manufacturing, which is boosting the India Data Center Market Growth. Adoption of these technologies would lead to increase in data volume and network bandwidth requirements, thereby resulting in growing demand for data center market in the forecast period.

This shift towards cloud has pushed increased investments in hyper-scale data centers with the global data centre market investments expected to reach $200 billion per annum by 2025. India is also expected to get a share in this growth with investments in the country and the market size was valued at $4.35 billion in 2021 and the Revenue in the Data Center market is projected to reach $7.54bn in 2022 and by 2027 it is expected to reach $10.09 billion by 2027, growing at a CAGR of 15.07% during 2022-2027.

There is growing demand, India will require huge investment in data center and cloud infrastructure over the next three years. Demand is likely to ramp up further due to the imminent rollout of 5G, increasing usage of IoT-enabled devices, data localization and cloud adoption. The businesses are looking to adopt cloud servers and surging cloud applications will make it imperative for businesses to have a reliable and secure IT infrastructure, where data can be stored and processed effectively.

Data Centers are the backbone of a digital revolution. The Government of India's proposed Draft Data Center Policy aims to make India a 'Global Data Center Hub'. This will provide long-term funds for investments in the sector. State Governments have also been providing incentives to industry players for setting up data center parks. The synergy of technology, legislation, demand, and investments is expected to usher in an era of high growth for India's DC industry in coming years.

An increase in cloud adoption, data localization, and adoption of new technologies such as 5G and IoT are driving the data center demand in India. India witnessed 16 new projects/expansions in 2021, and some major investors in the market include companies like Bharti Airtel, AWS, Colt Data Centre Services, ST Telemedia Global Data Centres India, NTT Global Data Centers, CtrlS and Yotta Infrastructure among others.

India is also witnessing investments by several new entrants, such as AdaniConneX, Ascendas India Trust, Equinix, EverYondr, Capitalland and Digital Realty & Brookfield Infrastructure, among others who are currently building, or have planned, data centers in the coming years.