According to a report by CRISIL, the Indian data centre industry is poised to attract investments over Rs 450 billion with the existing data capacity likely to double over the three fiscal years through 2026. This will be driven by the growing demand for data and storage across different companies, searching for long term-contracts. This growing demand for data centre solutions is expected to gain traction in few cities such as Mumbai, the National Capital Region, Chennai, Hyderabad and Pune, with Mumbai alone gathering about one third of these investments. This is due to the availability of sub-sea cable landing stations, proximity to larger enterprises that help in reducing latency and provide continuous power supply.

Meanwhile, to meet the rising demand for data, the installed capacity of Indian data centres is expected to more than double and reach approximately 1,700 megawatts (MW) by March 2026, from an estimated 780 MW as of March 2023. Given the strong demand, a diverse range of players, including both domestic and international data centre operators, private equity firms, and companies from sectors such as telecommunications, real estate, and engineering, procurement, and construction, are planning to invest in data centres.

As per the report, operational and technical expertise to meet stringent service agreements like uptime requirement of about 99.982 per cent would play a key differentiator. The surging demand for data centres is further fueled by the increasing adoption of cloud solutions and the rising usage and adoption of over-the-top (OTT) platforms. Mobile data traffic has grown at a compound annual growth rate (CAGR) of 45 per cent over the past five years. With the launch of 5G services, data consumption among retail users is expected to amplify further, increasing the demand for data centres for storage.