Bimal Khandelwal, Chief Executive Officer, STT GDC India
The Indian data centre (DC) market is experiencing remarkable growth, driven by increasing digitalisation, the growing adoption of artificial intelligence (AI) and internet of things (IoT), and rising demand in Tier I cities. Several players, big and small, are looking to leverage the Indian data centre opportunity. While existing players have embarked on large-scale capacity additions, several new entrants are developing significant capacity. Industry leaders discuss key trends and emerging focus areas in the DC space…
How would you assess the growth of the Indian DC market in the past five years? What have been the key drivers?
The Indian DC market has witnessed remarkable growth over the past five years, expanding at approximately 30 per cent CAGR, driven by accelerated digital adoption at scale at the enterprise and individual consumer level. This growth trajectory has established India as one of the world’s most significant digital markets.
India’s digital economy is expanding at over 50 per cent annually, with significant growth headroom given that active internet penetration still hovers around 60 per cent. The adoption of digitalisation at scale is to a large extent attributable to the successful implementation of world-class digital public infrastructure – the India Stack. A prime example is UPI, which facilitated over 100 billion digital transactions in 2024, exceeding the combined total of the rest of the world.
The government’s emerging role as a significant consumer of digital infrastructure services has been another crucial driver. Additionally, initiatives like ONDC, which could become the UPI of e-commerce, present immense growth potential in sectors with current low digital penetration. With investments exceeding $25 billion earmarked for digital infrastructure enhancement over the next three to four years, we are witnessing a perfect growth storm in the sector.
How are customer demands changing with the emergence of AI and edge computing? How are DC operators addressing these changing requirements?
The advent of AI fundamentally reshapes customer requirements and data centre infrastructure demands. Our market intelligence shows that 63 per cent of Indian firms are planning to initiate investment in AI and ML in 2024, while 66 per cent of Indian CEOs consider GenAI a top investment priority. India’s position as the second largest global AI talent base accelerates this transformation.
At STT GDC India, we have proactively adapted to these evolving needs. Our facilities are designed to host the most demanding workloads with the flexibility to support both traditional compute and AI compute workloads across various rack power densities. We are working on deploying cutting-edge AI workloads with our partners and ensuring our infrastructure can support high-performance scalability.
Our solutions feature highly secure, multilayered security, flexible support for dynamic changes, and adherence to reliable global standards. We specialise in configuring and supporting high-power -density deployments to accelerate businesses as they tap into the next wave of digitally enabled growth. Notably, AI is emerging as an almost equal contributor to our DC growth compared to traditional infrastructure outsourcing.
What has been the progress on the sustainability front?
STT GDC India has been a pioneer in sustainability within the Indian data centre space. We were the first in India to commit to becoming carbon neutral in operations by 2030, implementing a comprehensive ESG strategy aligned with the UN Sustainable Development Goals.
Currently, 48 per cent of our power consumption comes from renewable energy sources such as solar and wind, and we are targeting to increase this to over 60 per cent in the next two to three years. Our efforts help avoid over 176,000 tonnes of CO2 emissions annually. We have achieved one of the region’s lowest water utilisation effectiveness rates through rainwater harvesting and RO plants.
Unlike most operators, we maintain a dedicated power functionary focusing on renewable energy procurement. Our ESG team, part of the group ESG steering committee, monitors performance and executes key initiatives every year. Our facilities are green building certified. In fact, the STT GDC India portfolio contains India’s only net zero energy- and water-certified DC based out of Bengaluru, demonstrating our commitment to operational excellence and sustainability.
What are some of the biggest challenges that the industry faces today? Do you have a regulatory/policy wish list?
As the industry scales rapidly, we face several critical challenges. While power infrastructure availability has improved significantly, ensuring reliable power at scale remains crucial. Though increasingly supportive, the regulatory environment needs further streamlining across states for easier expansion and operation.
Our policy wish list includes some of the following:
- Standardised policies across states to facilitate easier expansion
- Enhanced grid reliability and improved access to green power
- A clear framework for renewable energy procurement and uniformity of open access implementation across states
- Streamlined approval processes across different jurisdictions
- Full implementation of infrastructure status benefits
- Development of skilled talent pools.
What is the outlook for the Indian DC market over the next few years? What will be the key opportunities?
The outlook for India’s DC market is extremely positive. We project the market to exceed 4-5 GW by 2030. At STT GDC India, we are well positioned with our current capacity of 318 MW across 28 facilities in 10 cities. We are investing significantly in expansion and plan to add approximately 250 MW of capacity over the next three to five years. Our major projects in Navi Mumbai (110+ MW), Chennai, Kolkata and Noida are set to go live.
Key opportunities lie in:
- AI infrastructure deployment at scale
- Edge computing expansion into Tier II cities
- Green data centre developments
- Hyperscale facilities to support cloud providers
- Traditional enterprise digital transformation.
We have an investment outlook of $3.2 billion over the next decade and have tied up the wherewithal for expansion in multiple states including Karnataka, Uttar Pradesh, Telangana, Maharashtra and Tamil Nadu.
