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India is Now Home to Highest Number of Data Centers in APAC


It's no secret that India bets hugely on sustainable technology development. According to CBRE South Asia, with a capacity of 950MW, India stands as the numero uno among major APAC data center market leaders, excluding China. It is racing towards becoming an attractive spot among data center hubs in APAC. The report anticipates that India will only grow in capacity by adding another 850 MW between 2024 and 2026.

In second place, Japan recorded a data center capacity of about 892 MW, followed by Australia, Singapore, Hong Kong, and Korea with 773 MW, 718 MW, and 531 MW, respectively.

Last year, there was an added supply of 255 MW, which is more than the 200 MW added in 2022, resulting in a total stock of approximately 1,030 MW at the end of the year. While several regions have about 330 MW of planned supply, the report predicts that it’s only bound to grow this year and could reach 1,370 MW on a stock growth of 30 percent annually. Chances are possible, as India’s entire DC stock amounted to 16 million square feet last year.

Investors Are Keen to Invest
The phenomenal growth behind the number of data centers in India is believed to be caused by the COVID-19 pandemic.

Secondly, it has the favor of investors both within and in the Asia-Pacific regions. Not to mention the ambitious bunch of global operators, real estate developers, and private equity waiting to thrive in the market, which is in its prime now, with some already proposed investment plans in the nation. Word spread, and now even more international investors are flying to India to form alliances and joint ventures with regional operators. The report predicts that the current situation could lead to a surge in competition in the DC market and M&A activity among operators, which is not far from happening. A likely consolidation is ought to occur if the market becomes very fragmented.

Money-Worth to Invest
It is the resilience and proven potential for high returns from the data center industry in India that has given hope to investors. The highlight of the industry’s high-return potential is the substantial capital inflow. Besides, receiving an investment commitment of over $40 billion from both domestic and international investors between 2018 and 2023 is no surprise to the magnetic power the industry commands.

Four States Have Given Cumulative Investment Commitments
When it comes to cumulative investment commitments four states have given word which are Tamil Nadu, West Bengal, Uttar Pradesh, and Maharashtra. This led to attracting global hyperscalers, with many ready to use their bespoke build-to-suit (BTS) facilities, as they see India as a great place to grow. Likewise, 85 percent of $ 27 billion invested last year has been specifically set aside for building these hypercale facilities.

he number of internet users and online transactions in India has increased significantly, which has fueled the growth of e-commerce sites, electronic payment methods, and other online services.

Hyperscalers are an entirely separate force. The main reason for the demand upsurge is due to the global hyperscalers' expansion of their operations, capital commitments, and legislative incentives. This has pooled in prominent international companies to make long-term financial commitments to join the Indian market. These hyperscale pre-commitments—350 MW between 2023 and 2025—reflect a strong increase in the demand for data centers.

Top State Contributors
Now, coming to the states with the largest data center market, Mumbai tops the charts not only for being the financial center of India but for housing vital landing sites that connect the country with the Middle East and Europe. It’s only bound to grow larger than ever, accounting for over 50 percent of all stocks as of last year. It even makes for a perfect travel destination thanks to its stable power supply, broadband connectivity, and skilled labor pool.

Up next is Chennai, holding about 18 percent market share, which has its advantage with its east coast position that harbors great access to East Asia. the majority of the attraction happening in the place is with cloud businesses, which have accounted for nine percent of the overall absorption.

Then, there is the 10 percent absorption coming from Pune. Its beneficiary factors’ credits goes to hyperscale cloud players taking up the periodic space in the area. A lot of these cloud businesses have set up their own shops, added with a number of investments in data center infrastructure.

Interestingly, the combined strength of Delhi-NCR, Bangalore, Hyderabad, and Mumbai is expected to pour over 30 percent of the upcoming supply, with over 60 percent coming from the latter two cities and over 60 percent in Mumbai and Chennai. It all depends on the careful selection of DC suppliers and negotiating favorable terms that meet their unique needs in light of the predicted supply increase.

Growing economies like Kochi, Jaipur, Ahmedabad, Lucknow, Patna, and Vishakhapatnam are being propelled by their advantageous positions and upgraded infrastructure, which includes improved power supplies and upgraded fiber and cable connections.

As a result, the colocation of data centers has grown to 1GW, double what it was 18 months ago. The next five years are expected to see a new supply of data centers estimated to reach up to 250 MW on a yearly basis. The top occupier sectors expected to fuel demand are BFSI companies, retail, healthcare, entertainment, telecommunications, cloud service providers, and others.

Flexible Government Subsidies
Government subsidies have proven to be beneficial to multinational cloud companies constructing their own captive data centers. Hyderabad has been a sought-after site due to its incentives, cheaper land costs, and accessibility to power. Self-build operations validate the industry's chances for sustained expansion. But it might take some time to move from self-build to operational stability, which would affect delivery schedules.

Active Adoption of Energy-Efficient Technologies
Energy-efficient technologies and sustainable practices are being aggressively adopted by the industry. Energy consumption and environmental effects become crucial factors as India's digital footprint grows. Data centers need to strike a balance between responsible resource usage and growth. Long-term sustainability depends on innovations in waste reduction, renewable energy adoption, and cooling system technology.

Following that, the expansion of online services and e-commerce fuels the data center business. The number of internet users and online transactions in India has increased significantly, which has fueled the growth of e-commerce sites, electronic payment methods, and other online services. To process massive amounts of data, guarantee flawless user experiences, and uphold high standards of data security, these platforms need a strong data center architecture.

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