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Key Points

India's data centre industry is poised for massive expansion, with capacity expected to multiply five times by 2030. This growth is fueled by skyrocketing data traffic, increased AI adoption, and supportive regulatory measures. The sector will require approximately $30 billion in investments to achieve this targeted capacity increase. This expansion also creates significant downstream opportunities in real estate, power systems, and cooling infrastructure.

Key Points: India Data Centre Capacity to Grow 5x by 2030 Says Jefferies

  • Driven by 30x data traffic growth since 2017 and rising internet penetration
  • AI adoption requiring 5-6x more power per server boosts demand
  • Regulatory push from DPDP Act and RBI encourages data localisation
  • $30 billion facility investment needed to reach 8GW capacity by 2030
2 min read

Driven by rising data traffic and use of AI, India's data centre capacity to rise 5x by 2030: Jefferies

India's data centre capacity to hit 8GW by 2030, driven by AI, data traffic surge, and data localisation rules, requiring $30 billion investment.

"India's data centre capacity looks set to jump 5x to 8GW by 2030 led by surging data traffic. - Jefferies Report"

New Delhi, September 17

India's data centre industry is set for strong growth over the next few years, with total capacity expected to rise five times to 8GW by 2030, according to a report by Jefferies.

The growth will be fueled by rising data traffic, increasing use of artificial intelligence (AI), lower latency needs, and regulatory push for data localisation.

It stated, "India's data centre capacity looks set to jump 5x to 8GW by 2030 led by surging data traffic."

The report highlighted that this expansion in capacity will need a large investment. Setting up 1MW of data centre capacity in India requires capex of USD 4-5 million.

To reach the targeted incremental capacity of 6.4GW by 2030, the industry will require a total facility capex of USD 30 billion. Along with this, leasing revenues are expected to grow five times to USD 8 billion by 2030.

The report stated that a sharp rise in demand for data centres in India has been driven by a 30x jump in data traffic since FY17.

This growth in traffic has been supported by rising internet penetration, higher smartphone adoption, and the growing popularity of OTT platforms, digital payments, and e-commerce.

In addition, regulatory measures such as the Digital Personal Data Protection (DPDP) Act, 2023, and guidelines from the Reserve Bank of India (RBI) have further supported demand by encouraging data localisation.

Another major factor that will drive demand is AI adoption. AI servers need five to six times more power compared to non-AI servers, and they also require liquid cooling, which further increases demand for data centre infrastructure.

At present, hyperscale cloud service providers (CSPs) account for 60 per cent of data centre clients, while the banking sector contributes about 17 per cent.

India's colocation data centre capacity has already increased five times to 1.7GW, and occupancy levels are high at 97 per cent. This indicates that demand is currently outpacing supply.

The report also pointed out that the growth in data centres will create downstream opportunities in several related sectors.

Real estate could benefit by USD 6 billion, while electrical and power systems may see opportunities worth USD 10 billion. Racks and fitouts could generate USD 7 billion, cooling systems USD 4 billion, and network infrastructure USD 1 billion.

Given the large investment requirements, access to capital will be key for companies aiming to scale in this market.

- ANI

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Reader Comments

P
Priya S
Hope this growth comes with proper environmental considerations. Data centers consume massive amounts of electricity - we need to ensure renewable energy integration from the start.
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Aditya G
$30 billion investment required! This is going to create so many jobs in construction, electrical, and tech sectors. Great opportunity for our engineers and technicians. 💼
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Sarah B
The AI server power requirement is staggering - 5-6x more power than regular servers. This will definitely put pressure on our power grids. Hope the planning includes energy infrastructure upgrades.
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Vikram M
Data localization through DPDP Act is a game-changer. Our data should remain in India for security and sovereignty. Good move by the government! 🔒
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Michael C
The downstream opportunities are massive - $6B in real estate, $10B in electrical systems. This could transform entire industrial corridors across India. Smart planning needed for tier 2 and 3 cities too.
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Ananya R
97% occupancy shows how much demand exists! But I hope this growth doesn't lead to monopolies. We need healthy competition to keep prices reasonable for startups and small businesses.

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