According to a report by 1Lattice, India’s data centre market, valued at approximately $7 billion in 2023, is projected to grow at a compound annual growth rate (CAGR) of 8 per cent, reaching $8 billion by 2025. The country’s data centre capacity is also expected to increase from 1,150 MW in 2023 to 1,700 MW by 2025, reflecting a robust growth rate of 22 per cent.
The report highlighted that major cities like Mumbai, Delhi-NCR, and Bengaluru have become central hubs for colocation services, collectively accounting for over 55 per cent of the nation’s data centre capacity. Government initiatives such as the ‘Data Centre Incentivisation Scheme’ and ‘Make in India’ are playing a crucial role in enhancing the sector’s growth.
On a global scale, the data centre market is anticipated to expand from $227 billion in 2023 to $250 billion by 2025. This growth is driven by the widespread adoption of cloud computing, edge technologies, and artificial intelligence/machine learning (AI/ML), which are transforming how industries manage and store data.
The report estimated that India has the potential to add an additional 500 MW of data centre capacity over the next four years. The sector has already seen significant expansion, doubling from 540 MW in 2019 to 1,011 MW in 2023. Notably, there was a 21 per cent increase in data centre absorption during the first half of 2024, with demand for edge data centres surging from tier 2 and tier 3 cities.
