According to a report released on Wednesday, India had a 21% increase in data center absorption in the first half of this year, from 778 megawatts (MW) of capacity in H1 2023 to roughly 942 MW in H1 2024. This development was attributed to a surge in demand for edge data centers from tier 2 and 3 cities.
Global real estate advice firm Savills India estimates that in the January–June timeframe, around 71 MW of new IT capacity were installed across major data center micro-markets. During this time, the market concurrently saw deals involving about 200 MW of IT capacity.
By the end of 2024, the market is anticipated to have grown to over 400 MW of IT capacity.
According to the research, the demand was mostly driven by hyper scalers, the banking, financial services, and insurance (BSFI), IT and ITeS, and service sectors. These industries all significantly depend on data center operators for colocation and related services.
According to Srihari Srinivasan, Director and Lead Data Center Services at Savills India, “we project a strong demand for data center capacity in India by the end of 2024, with an estimated requirement of 400 MW across major cities.”
Data center operators are extending their services beyond colocation to include networking, cloud solutions, specialized hardware like GPUs, and other managed services, even though supply is predicted to reach 350 MW during the same period.
With a commanding 54.9 percent of the total capacity, Mumbai commanded the largest part of the data center market. Chennai (12.3 percent), Bengaluru (8.2 percent), Pune (7.2 percent), and other cities followed.
10% of the shares were held by enterprises, and 22% were held by hyperscalers.
The remaining 68% was used by a mix of corporations and hyper scalers, demonstrating a varied utilisation pattern in the data center sector, the survey stated.
According to Srinivasan, “the need for ultra-low latency for mobiles, the rise of 5G, and the surge in internet usage are driving this growth, which is also creating a growing demand for edge data centers in specific areas.”
Additionally, the need for data center services is growing due to the growing adoption of AI and IoT across a variety of industries, with GPU-powered solutions being essential in meeting these demands.
