The Indian colocation data centre economy is fast gearing towards becoming a 1GW marketplace joining only a handful of countries home to such high market supply including the US and China.

Newly published data by global real estate firm JLL shows capacity is posed to increase from 499 MW in IT load in H1 2021 to 1008 MW by 2023, marking a significant 102% growth.

Researchers point out several factors to the construction boom from the approval of the draft Personal Data Protection Bill by the joint parliamentary committee to a high digital penetration up and down the country home to 1.4 people.

Mumbai and Chennai are expected to be leading data centre hubs due to assured power supply, undersea cable landings and large user markets.

Rachit Mohan, head, Data Center Advisory – India, Co-Head, Office Leasing Advisory – Mumbai, JLL, said: “The importance of information in form of data has gained prominence over the years with the entire digital revolution being driven by the usage of data. The colocation industry is expected to benefit from the legislation due to the prerequisite for data storage in the country.

“The potential of the industry is evident from the fact that three central legislations and four states have enacted data centre sector policies while four more states are in the process of notifying their policies.”

The Central Government of India has outlined the importance of the sector by formulating a Data Centre Park Policy and the creation of four Data Centre Economic Zones that aims to make India the global data centre hub.

The draft policy seeks to accord “infrastructure” status to the sector bringing in the benefits of availing long-term credit from domestic and international lenders.

Also commenting on the market movements, Samantak Das, chief economist and head of Research & REIS (India), JLL, said: “The increasing digital economy has also necessitated regulations to protect the right of Indian users by storing the details of the digital transaction locally.

“The Reserve Bank of India has issued a directive imposing data localisation requirements on service providers/intermediaries / third-party vendors and other entities in the payment ecosystem. The financial regulator has issued various directives for financial intermediaries to comply with the localisation provisions. The local storage of digital transactions has already led to an increase in demand for data centres from the BFSI sector.”

Constant Growth

Whereas just two years ago expansion news out of India were sporadic, 24 months later they are now pouring on a weekly and more recently, almost daily flows.

From multi-million investments to largescale billion Dollar capital allocations, many of the world’s private equity firms as well as data centre operators have made serious bets in India ,deemed as one of the next big opportunities for the sector in the next decade.

The country is today home to less data centres than, for example, Europe which currently houses 3-4,000 facilities. India is expected however to add over 10,000 data centre buildings and locations in the next decade or so, according to market sources.

Recent announcements include the one from Nxtra by Airtel which has launched a hyperscale data centre park in Chennai earlier this week.

The facility is Nxtra by Airtel’s third large data centre in the city and offers 38 MW IT load powering servers across 270,000 sq.ft.

Ajay Chitkara, Director and CEO, Airtel Business said: “Chennai, with its strategic location and access to cable landing stations, has the potential to become a regional data centre hub for South Asia.

“Nxtra by Airtel is already serving large Indian and global customers from the city and we will continue to invest to expand our operations here. I compliment the State Government for providing an enabling environment and infrastructure support to set up this vital digital infrastructure.”

With the latest launch, Nxtra by Airtel’s network of data centres in India has reached 11 hyperscale and 120 edge data centres in addition to submarine landing stations.

Nxtra by Airtel is currently undergoing a Rs 5,000 crore ($673 million) investment journey to triple its data centre capacity across India over the next three to four years.

Also this month, Hiranandani Group unveiled plans to invest over Rs 30,000 crore ($3.88 billion) in building 24 data centre facilities across India through its IT business unit Yotta Infrastructure.

Adani, Equinix (NASDAQ: EQIX), Digital Realty (NYSE: DLR), EdgeConneX, Blackstone (NYSE: BX), CtrlS, RackBank Datacenters, Sify Technologies, are just a few names of the many other operators and investors which have announced largescale expansions in India.