According to a report by JM Financial, India is well-positioned to become a leading data centre hub, driven by several enabling factors such as enhanced cross-border connectivity through the increasing number of sub-sea cable landings and relatively lower capital and operational costs, including for utilities and manpower.
The firm highlighted that India’s strategic location between the Middle East and Southeast Asia offers a significant geographical advantage. The report noted that demand for data centres in India is witnessing a sharp rise. As of 2024, India’s co-location data centre capacity stands at 1.35-gigawatt (GW), marking a 38 per cent year-on-year (YoY) increase.
That said, India continues to have a relatively small share of global data centre infrastructure. It added that although the country contributes around 20 per cent to global data generation, it accounts for just 5.5 per cent of the world’s data centre capacity. This has led to a notable mismatch between demand and supply, driving a cyclical upsurge in capacity addition.
To match even half of China’s data centre density, India would require a total capacity of 5 GW by 2030, the report estimated. This is in line with the current pipeline of 3.3 GW in under-construction and planned capacity by 2028.
Further, JM Financial expects substantial capital investment in the sector over the coming years. However, this expansion will primarily address domestic demand. Recognising the growth potential, the firm also foresees an increasing number of data centre companies entering the stock markets within the next five years.
