Data Centers to Enable India's Trillion-Dollar Digital Economy Growth

India’s data center industry will lead to a trillion-dollar digital economic growth by 2025, and Chennai and Mumbai will be the effective accelerators of its capacity expansion, according to a study titled “Data Centers: The building blocks of the digital revolution in India” by JLL and Extra.  

The study stresses that India’s data center will vastly rely on coastal cities with ready access to cable landing stations, and landlocked cities like Delhi NCR, Hyderabad, Bengaluru, Kolkata, and Pune will be beneficiaries of a growing data center industry.   

Chennai, which has infrastructure benefits like the highest internet speeds in the country, and availability of submarine cable landing infrastructure, green energy options, land supply, skilled workforce, and supportive government policies, will become the following data center hub after Mumbai, said the study.  

As such, the expansion of the Indian data center industry will be supported by the fast adoption of digital infrastructure caused by Coronavirus cloud consumption, rising digital usage, and the national 5G rollout.   

“India’s digital transformation is anticipated to form a value worth $1 trillion by 2025. New areas like agriculture, logistics, jobs, healthcare and skills market, e-governance, and other areas, associated with advanced technologies will lead to significant growth of data storage and computing,” said Rachit Mohan, Head, Data Centre Advisory, India, JLL.   

Mohan also mentioned that the Indian data center industry would be the backbone, allowing India to become a global hub. Due to their locations and infrastructure, Mumbai and Chennai are expected to be the largest beneficiaries of potential growth in India’s data center market.   

India’s data center will depend on coastal cities with ready access to cable landing stations. In contrast, landlocked cities like Delhi NCR, Hyderabad, Kolkata, Bangalore, and Pune will also benefit from a growing data center industry.   

According to the joint search between JLL and Extra research, the country’s digital journey is accelerating rapidly, and cloud, telecom players, and data centers are adopting several strategies to capture a share of this growing market.   

Mumbai and Chennai are expected to be the biggest beneficiaries of possible growth in India’s data center market in the scene of their locations and infrastructure.   

“The data center industry is witnessing exponential evolution, given India’s strategic location in the region. With its host of infrastructure advantages like the highest internet speeds in the country, land supply, availability of submarine cable landing infrastructure, green energy options, supportive government policies, and skilled workforce, Chennai will arise as the next data center hub after Mumbai. As the industry acquires infrastructure status, data center expansion will accelerate and with it the inherent need for sustainable measures,” said Rajesh Tapadia, CEO, Extra by Airtel.   

Pune was created as a disaster recovery location for financial services, banking, and insurance (BFSI) players due to its nearness to Mumbai. Bengaluru has a higher proportion of on-premises data centers operated by global in-house centers of international technology firms.   

In India’s densely inhabited eastern region, the expectation is that Kolkata will have a new cable landing station in the next few years to arise as an important location, it added.