As Indians flock online, developers are racing to build new data centers. The first half of 2021 saw an increase in data center capacity of 92 percent, according to analyst firm JLL. In 2023, India's total power capacity for data centers will double from 499 megawatts to 1,007 megawatts.

The increase in data center demand is partly due to the pandemic, which spurred e-commerce, remote work, and cloud computing, all of which transmit large amounts of data through data centers. According to a report titled "Data Centers: The Building Blocks of the Digital Revolution in India," the convergence of data protection, strong demand from cloud players, migration from captive to cloud, industry-friendly regulations, government-led initiatives, and investments will drive the overall growth of the data center industry in India.

Mumbai and Chennai will be areas of growth for the data center industry due to their business and infrastructure advantages, strategic location, and cable landing stations that are well positioned to support and facilitate the development of data centers throughout India. Other cities where digital adoption is gaining traction are Bangalore, Hyderabad, and Kolkata, where companies like Mantra Data Centers announced plans to develop data centers worth US$1 billion.

The government in India supports this boom in data center investments with a Rs 12,000 crore (US$1.58 billion) program to encourage companies to set up data centers. It is also planning to provide up to 4 percent of capital investment, along with real estate support and faster clearances, to attract companies.

Photo credit: Shashank Hudkar