India’s data centre market to grow to $8 billion by 2026: Assocham-EY

India’s data centre market is projected to grow to $8 billion by 2026, according to a new report. The report also said that the country is poised to be a global hub for data centres focused on cloud computing and riding on technologies like artificial intelligence-machine learning (AI-ML) and analytics. 

According to the Assocham-EY report, the data centre market had already touched $4.4 billion in 2020, driven by an ecosystem of innovation, entrepreneurship and policy support from the government. 

The report stated that the next decade would witness an unprecedented change and new emerging technologies in the field.  

“Data centres in all forms, shapes, and roles — will continue to aid innovation and drive technology, leading to business transformation. As the country has the ability to leap directly into the multi-cloud age, India will be a main data centre growth hub for the next decade,” the report stated. 

Currently, India has over 80 third-party data centres with a total count of approximately 130, which is likely to increase exponentially in the upcoming years as the country strives to become a truly digital economy. 

“The surge in internet users, massive rise of startups, fast adoption of cloud computing, government’s investment in the IT sector is some of the critical drivers of digital and economic growth,'' Assocham Secretary General Deepak Sood said. 

The report highlighted favourable market conditions such as low cost of internet and data plans and increasing demand hold potential for growth.  

Data centres are evolving as an alternate asset class for varying real estate portfolios. Hyperscale data centres are being developed by reputed Indian real estate developers in partnership with global operators, the report said. The real estate or the land cost for data centres is usually about 8% to 10% of overall capital expenditure. Besides the metro cities, tier II and III cities are also emerging as drivers of the digital revolution. 

The rapid transition to a digital economy in India has witnessed a huge data boom in recent months. Several technology companies like Cisco, NTT Data, Equinix, Yotta Trellix, Web Werks and Vultre, among others, have set up their data centre operations in the country in the last six months. 

“India's progress towards becoming a true digital economy, backed by progressive government policies, is encouraging domestic and hyperscalers to make huge investments in the country,” Sunil Gupta, CEO of Hiranandani group-run Yotta Infrastructure mentioned in an earlier interaction with Tech Circle.   

India’s data centres are distributed between its top four metros, with Mumbai accounting for the majority share, followed by Chennai and Hyderabad.  

In March, a joint study published by JLL India and Nxtra, the data centre subsidiary of Bharti Airtel, said that data centres are set to power the country’s fast-paced digital transformation that’s likely to create an economic value of $1 trillion by 2025.