India Data Center Market Report

Market Overview:

The India data center market size reached US$ 4.5 Billion in 2023. Looking forward, IMARC Group expects the market to reach US$ 11.6 Billion by 2032, exhibiting a growth rate (CAGR) of 10.98% during 2024-2032. The growing adoption of digital technologies in several industries, such as e-commerce, banking and healthcare, rising supportive policies by the Government, and increasing popularity of cloud-based services among industries are some of the major factors impelling the market growth.

India Data Center Market Analysis:

• Major Market Drivers: The India data center market statistics is showing strong growth, driven by the increasing digitization of businesses and the rise in the demand for cloud-based services.
• Key Market Trends: The widespread adoption of cloud computing, big data analytics, and internet of things (IoT) technologies among Indian enterprises, which require data processing capabilities.
• Competitive Landscape: Some of the major market players in the India data center industry include Adani Group, Arshiya Limited, CTRLS Datacenters Ltd., Equinix Inc., ESDS Software Solution Ltd., NetDataVault (NGBPS Limited), Nikom InfraSolutions Pvt. Ltd., Nippon Telegraph and Telephone Corporation, Nxtra Data Limited (Bharti Airtel Limited), Sify Technologies Limited, Sterling and Wilson Pvt. Ltd., among many others.
• Challenges and Opportunities: Challenges include high operational cost associated with running data centers, including energy utilization and maintenance expenses. However, India data center market recent developments like 5G technology, which will necessitate dense networks of small data centers to ensure low-latency data transmission.

India Data Center Market Trends:

Government Initiatives

The increasing initiatives by the Government of India, including Digital India and Make in India, are supporting the market growth. These measures aim to improve the digital infrastructure of the nation, create digital services, and draw investments from the various sectors. Additionally, governmental efforts in building data center parks and financial incentives for operating data centers are driving the India data center demand.

Apart from this, there is a rise in the adoption of digital technologies in several industries, such as e-commerce, banking, healthcare, and government service. According to the India Brand Equity Foundation (IBEF), with a compound annual growth rate (CAGR) of 27%, the Indian e-commerce will reach US$ 163 billion in 2026.

Growing Volume of Data

The rising need for data centers to handle, process, and store data as various firm and industries are adopting digitalization is strengthening the India data center market growth. Besides this, the increasing internet penetration and widespread adoption of cellphones, which are generating huge amounts of data, are positively influencing the market. The Telecom Regulatory Authority of India (TRAI) reports that the overall number of internet users increased from 850.95 million at the end of September 2022 to 865.90 million at the end of December 2022, representing a quarter-over-quarter growth of 1.76%. The overall number of internet users is 865.90 million, of which 833.49 million use wireless and 32.41 million use wired in 2022.

Adoption of Cloud Services

The growing integration of cloud services by various industries is offering a favorable India data center market outlook. These services provide several advantages, such as storage, data analysis, and scalable infrastructure, which is leading to higher adoption among businesses. This cloud-based transformation is the need for data centers that can offer dependable and secure cloud services to individuals and enterprises. Based on the data provided by the NASSCOM and Oliver Wyman research, cloud computing would account for 8% of India's GDP by 2026. By 2026, it has the potential to generate 14 million new jobs and improve the country's GDP by $310–380 billion. India might be able to fully exploit the benefits of the cloud industry with a concentrated, all-out effort if it can consistently increase cloud investment by 25–30% over the following five years (2022–2029), reaching US$ 18.5 billion.

Key Market Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the India data center market, along with forecasts at the country or state levels from 2024-2032. Our report has categorized the market based on application, type, component, and size.

Breakup by Application: 

• Banking Financial Services & Insurance (BFSI)
• Government
• IT and Telecom
• Media
• Retail
• Manufacturing
• Others
   

IT and Telecom holds the largest share of the industry

The report has provided a detailed breakup and analysis of the India data center market based on the application. This includes banking financial services & insurance (BFSI), government, IT and telecom, media, retail, manufacturing, and others. According to the report, IT and telecom represented the largest segment.

IT and Telecom sector represents the largest segment primarily due to the exponential growth in data traffic, driven by increased smartphone usage, internet penetration, and the rapid adoption of cloud services across the sector. As per Internet and Mobile Association of India (IAMAI), 56% of newly connected Indians would reside in rural areas by 2025. Telecommunication companies and IT service providers are heavily investing in expanding their data center capacities to handle this surge in data, and to support emerging technologies, such as 5G, IoT and artificial intelligence (AI). The robust infrastructure requirements of these technologies are catalyzing the demand for advanced data centers.

Breakup by Type: 

• Enterprise Data Centers
• Colocation Data Centers
• Edge Data Centers
• Hyperscale Data Centers
   

A detailed breakup and analysis of the India data center market based on the type have also been provided in the report. This includes enterprise data centers, colocation data centers, edge data centers, and hyperscale data centers.

Enterprise data centers primarily serve the needs of a single organization, providing tailored infrastructure to support their specific data and processing requirements. These data centers are often built and maintained by the businesses themselves, allowing complete control over their data operations and security. The segment is significant in India due to large corporations and government organizations opting to manage sensitive data in-house.

Colocation data centers offer space, equipment, and bandwidth for rental to multiple tenants, who can benefit from shared infrastructure while maintaining control over their own servers and storage. This segment is growing in India as SMEs seek cost-effective, scalable solutions without the burden of building and managing their own data centers. Colocation provides businesses with the flexibility to scale up or down based on their needs and the advantage of advanced facilities, typically including robust security measures, reliable power supplies, and high-bandwidth connectivity.

Edge data centers are smaller facilities located close to the point of data utilization to reduce latency and bandwidth use in communications. This type is increasingly relevant in India due to the rapid expansion of IoT applications and mobile computing, which demand real-time processing and analysis.

Hyperscale data centers are massive facilities built by major cloud service providers and large tech companies to support extensive cloud computing resources. These data centers are characterized by their vast size, scale, and efficiency, designed to manage enormous quantities of data and provide extensive computing services to thousands of users simultaneously.

Breakup by Component: 

• Hardware
• Software
• Service
   

Hardware accounts for the majority of the India data center market share

The report has provided a detailed breakup and analysis of the India data center market based on the component. This includes hardware, software, and service. According to the report, hardware represented the largest segment.

Hardware dominates the market as per the in the India data center market overview, driven by the essential requirement for robust physical infrastructure. It consists of servers, network equipment, cooling systems, storage devices, which are necessary for effective functioning of data centers. The growing need for high functioning computing hardware in numerous sectors, including information technology (IT) and banking, is bolstering the market growth. According to IBEF, in FY22, the IT sector generated 7.4% of India's GDP and by 2025, it is projected to contribute to 10%. Moreover, major companies are investing in this to improve their processing power and storage capacities.

Breakup by Size: 

• Small Data Center
• Mid-Size Data Center
• Large Data Center
   

The report has provided a detailed breakup and analysis of the India data center market based on size. This includes small data center, mid-size data center, and large data center.

The small data center segment caters primarily to small and medium-sized enterprises (SMEs) that require limited data processing capabilities. These data centers are cost-effective and occupy less space, making them suitable for businesses with modest IT resource demands. They often support operations that do not require the extensive infrastructure and massive power supply associated with larger data centers. The growth in this segment is fueled by the increasing number of startups and small businesses in India seeking digital transformation without the need for extensive capital investments in IT infrastructure.

Mid-size data centers are ideal for businesses that are experiencing growth and need more capacity than small data centers but do not require the vast scale of large data centers. This segment provides a balance between scalability and manageability, offering more resources and capabilities than small data centers, with better cost-efficiency compared to large facilities. They are popular among medium-sized enterprises and are often utilized for regional service delivery or as disaster recovery sites. Mid-size data centers significantly contribute to the India data center market revenue, serving as a strategic choice for medium-sized enterprises seeking a balance between scalability, manageability, and cost-efficiency.

The large data center segment includes facilities that serve large corporations and cloud service providers that demand high volumes of data processing and storage. These data centers are characterized by their extensive use of cutting-edge technology, high energy consumption, and notable space requirements. They are designed to handle massive loads with high efficiency and reliability, often supporting critical operations across various sectors, including banking, IT, and telecommunications. The growth in this segment is driven by the increasing adoption of big data analytics, AI, and machine learning (ML) technologies, which require substantial computational power and data storage capabilities.

Breakup by Region:

• Maharashtra
• Tamil Nadu
• Uttar Pradesh
• Gujarat
• Karnataka
• West Bengal
• Rajasthan
• Andhra Pradesh
• Telangana
• Madhya Pradesh
• Delhi NCR
• Punjab
• Haryana
• Others
   

Maharashtra leads the market, accounting for the largest market share

The report has also provided a comprehensive analysis of all the major regional markets, which include Maharashtra, Tamil Nadu, Uttar Pradesh, Gujarat, Karnataka, West Bengal, Rajasthan, Andhra Pradesh, Telangana, Madhya Pradesh, Delhi NCR, Punjab, Haryana, and others. According to the report, Maharashtra was the largest market for data centers in India.

Some of the factors driving the Maharashtra data center market in India included the government's focus on digital transformation, the increasing adoption of cloud computing, and the expanding e-commerce sector. Maharashtra State Skills University (MSSU) and Bharat Web3 Association (BWA) signed a memorandum of understanding (MoU) on November 15, 2023, to work together to develop qualified talent in Web 3.0 technology. By working together on collaborative projects, they hope to improve research, education, and skill building in the area, providing pertinent instruction and training to empower people in the Web 3.0 sphere. This collaboration aims to foster creativity, provide competent workers with more authority, and create a positive atmosphere for India's technical advancement.

Competitive Landscape:

• The market research report has also provided a comprehensive analysis of the competitive landscape in the market. Detailed profiles of all major companies have been provided. Some of the major market players in the India data center industry include Adani Group, Arshiya Limited, CTRLS Datacenters Ltd., Equinix Inc., ESDS Software Solution Ltd., NetDataVault (NGBPS Limited), Nikom InfraSolutions Pvt. Ltd., Nippon Telegraph and Telephone Corporation, Nxtra Data Limited (Bharti Airtel Limited), Sify Technologies Limited, Sterling and Wilson Pvt. Ltd., Web Werks India Pvt. Ltd., among many others.
  
  (Please note that this is only a partial list of the key players, and the complete list is provided in the report.)
   
• Major India data center companies are proactively broadening their infrastructure by making major investments in constructing new facilities and renovating current ones in order to meet the increasing need for data processing and storage. They are progressively implementing sustainable practices by incorporating green technology in an effort to lessen their influence on the environment. Furthermore, technology providers frequently form strategic alliances and collaborate with other firms to improve their service offerings through the use of cutting-edge data management, cloud computing, and security technologies to maintain their competitiveness in the market. For instance, in August 2023, Equinix invested $42 million to build a new data center named MB4 in Mumbai, India. The data center enhanced the interconnection platform of Equinix, supporting digital transformation in India, amidst growing demand for data center and interconnection services.

India Data Center Market News:

• September 2022: Nxtra Data Ltd. (Bharti Airtel Limited) teamed up with Bloom Energy to install low environmental impact fuel cells at its Karnataka data center to reduce carbon emission. The company invested Rs 5000 crore over the course of four years and triple its capacity, showing its commitment to sustainability.
• November 2023: Adani Enterprises plans to invest $1.5 billion over the next three years in its data center business, aiming for nine centers with a total capacity of 1 gigawatt by 2030. 
• April 2024: CTRLS Datacenters Ltd. is planning to build a new 130,000 sq ft data center in Hyderabad's Gachibowli district, with a capacity of 13MW. The goal of this facility is to support the increasing demand and fortify the company’s position in the Indian data center industry.

India Data Center Market Report Coverage:

Key Benefits for Stakeholders:

• IMARC’s report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the India data center market from 2018-2032.
• The research study provides the latest information on the market drivers, challenges, and opportunities in the India data center market.
• The study maps the leading, as well as the fastest-growing, regional markets.
• Porter's five forces analysis assists stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the India data center industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.