Supply-chain constraints may cap India's data centre capacity at 3 GW by 2030: Report
New Delhi, August 3
Execution bottlenecks and supply-chain constraints could significantly slow India's data centre capacity expansion, limiting operational capacity to around 3 gigawatts by 2030 despite industry announcements targeting more than 6 GW, according to an Axis Capital report.
The report noted that while India's installed data centre capacity currently stands at around 1.4 GW, publicly announced expansion plans appear overly optimistic in view of execution challenges.
"Publicly-announced capacity targets of 6-8GW by 2030 look inflated; the expert's realistic estimate is 3.4-3.6GW cumulative operational DC capacity by mid-2030. On a more conservative basis... only ~2.8GW is likely to actually be operational by then given execution constraints," the report said.
According to the report, the biggest hurdles are bottlenecks in the mechanical, electrical and plumbing (MEP) supply chain, limited availability of critical equipment and skilled manpower, and delays in obtaining power connections.
It said award-to-commissioning timelines typically stretch to 28-36 months, while supply constraints have worsened as multiple developers execute projects simultaneously.
"DG gensets effectively limited to three global brands (Caterpillar, Cummins, MTU) are usable for hyperscaler-grade builds, and all three are already booked out roughly two years ahead given how many players are building simultaneously," the report said.
Besides equipment shortages, EPC contractor capacity, manpower availability and power sanction timelines of around 18 months are also emerging as major constraints, the report added.
The report further noted that India's preference for vertical data centre construction due to land and floor space constraints makes projects more complex and lengthens execution timelines compared with horizontal facilities built in overseas markets.
Despite the near-term challenges, the long-term outlook remains positive. The report said India's data centre industry could witness a sharp increase in capacity over the following five years if currently announced projects are executed as planned.
"The expert sees potential for 7-8 GW of capacity by 2035, if currently announced projects materialize in full, though in the nearer term, a more realistic 2030 operational estimate remains closer to ~3 GW," the report added.
— ANI
Reader Comments
Honestly, this is a blessing in disguise. We keep hearing about AI and data centres being the next big thing, but if we rush this and create 8 GW of underutilized or poorly managed capacity, that's just wasted capital. Better to build 3 GW properly with clear execution timelines, then scale up. Sustainable growth over hype any day.
The 28-36 month timeline is the real story here. In Singapore or parts of the US, you can get a facility up in 12-18 months. We're doing vertical builds because land is expensive and permits are a nightmare. India needs to adopt more efficient permitting processes, especially in states like Maharashtra, Telangana, and Karnataka, which are currently the frontrunners. Otherwise, we'll never hit the numbers we're advertising.
It's frustrating to see us lag behind while China and even Vietnam are racing ahead in data infrastructure. But I'm still optimistic. The government's PLI schemes for electronics should be extended to include data centre components like chillers, UPS systems, and switchgear. If we can Make in India for these parts, we won't be held hostage to global supply chains.
Interesting to see the ground reality vs. PR announcements. I work in the hyperscale industry back in the US, and our teams in India consistently say that power procurement is the biggest pain point. The state electricity boards aren't equipped to handle this scale of load, and the grid needs significant upgrades. 3 GW by 2030 seems about right unless there's a coordinated push on the energy sector.
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