Surajit Chatterjee, Managing Director, DC India, CapitaLand Investment
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 industry has been on an extraordinary growth trajectory, having become one of the most dynamic and rapidly evolving digital infrastructure markets worldwide. Over the last five years, we have witnessed a CAGR of over 20 per cent, largely driven by increased data consumption, digital transformation and cloud adoption.
Policy and infrastructure support have played a crucial role in the expansion. The Indian government’s DC push through Digital India, dedicated DC policies across states and financial incentives have been instrumental in fostering growth. Global hyperscalers and cloud providers have rapidly expanded their footprint in India, boosting the demand for large-scale, high-performance DCs. The roll-out of 5G has further accelerated the demand for low-latency, high-bandwidth applications, thereby driving the need for regional and edge DCs. Additionally, the rapid digitisation of the BFSI, e-commerce and healthcare sectors has led to a surge in data consumption and cloud migration, necessitating scalable and secure DC solutions.
How are customer demands changing with the emergence of AI and edge computing? How are DC operators addressing these changing requirements?
The rise of AI and edge computing has fundamentally changed what customers expect from DCs. Organisations now require lower latency and edge deployments as the need for real-time processing is driving demand for distributed edge nodes. Further, AI workloads demand higher compute power, leading to the rise of liquid cooling solutions and power-efficient designs. Customers are seeking modular DCs that allow seamless scalability in response to fluctuating workloads. Additionally, with stringent data privacy laws and increasing cyberthreats, security-first infrastructure is now a top priority.
CapitaLand is actively investing in AI-ready, high-density infrastructure while expanding edge computing capabilities to meet these evolving needs. Our focus remains on providing cutting-edge, secure and efficient solutions that support the future of AI and cloud computing.
What has been the progress on the sustainability front?
Sustainability is no longer an option – it is an imperative. At CapitaLand DCs, we have embedded green initiatives into our core operations. We use AI-driven energy management systems to maximise energy efficiency and reduce power usage effectiveness (PUE). Further, aligned with Union Budget 2025, which incentivises green energy adoption, we are integrating solar and wind energy solutions across our facilities. We are also leveraging innovations to optimise energy consumption, which includes everything from liquid cooling to free air cooling. Meanwhile, many of our DCs are Leadership in Energy and Environmental Design-certified, demonstrating our commitment to green and sustainable operations.
As the industry moves towards carbon-neutral operations, we remain committed to advancing sustainability through continued investment in green technologies.
What are some of the biggest challenges that the industry faces today? Do you have a regulatory/policy wish list?
While the industry is experiencing tremendous growth, there are challenges that need to be addressed, including infrastructure bottlenecks such as land acquisition, power availability and network connectivity. There is also a need for harmonised policies across states to ensure seamless investments and operations. Further, the demand for skilled professionals in DC operations, cloud and cybersecurity continues to outstrip supply.
On the policy front, we advocate for faster environmental and land clearances to expedite DC construction, incentives for renewable energy adoption to encourage sustainability, standardised edge computing policies to support emerging technologies, and stronger data localisation frameworks to ensure security and compliance.
By addressing these challenges, India can further solidify its position as a global DC hub.
What is the outlook for the Indian DC market over the next few years? What will be the key opportunities?
India is well on its way to becoming a global digital infrastructure powerhouse, with investments expected to surpass $10 billion by 2027. The next wave of growth will be shaped by edge and hyperscale expansion. More localised edge DCs will emerge to support 5G, IoT and real-time applications. Further, as AI and quantum computing evolve, DCs will need to become ready for high density and high performance. With strong policy backing from the Union Budget 2025, carbon-neutral and energy-efficient DCs will be a key focus. Additionally, collaborations between international tech giants, hyperscalers and Indian DC operators will drive the next phase of expansion.
At CapitaLand DCs, we are poised to lead this transformation with our commitment to innovation, sustainability and customer-centric solutions. Our vision is to shape the future of digital infrastructure in India and beyond.
