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Indian Data Center Market is Growing Three Times Faster Than the Global Industry

Published: 9.24.2023

The data center market in India is expanding roughly three times faster than the global industry, as reported by S&P Global Market Intelligence. While the global data center industry is growing with a compound annual growth rate (CAGR) averaging 7%, India's data center industry is growing at 23% for the same timeframe.

This growth is being driven by a number of factors, including the increasing adoption of cloud computing, the rise of artificial intelligence (AI) workloads, and the Indian government's data sovereignty rules.

Analysts say that this growth is just the beginning. As enterprises migrate from legacy systems to the cloud and AI workloads rise, there is a growing need for larger and more sophisticated data centers. According to JLL data, data center capacity in India has doubled from 350 MW in 2019 to 722 MW in 2022 and is expected to reach 1.4 GW by 2025.

The growth of the data center market in India is also being driven by the government's data sovereignty rules, which mandate that certain types of data, such as financial data and personal data, be stored within the country. This has led to an influx of foreign investment in the Indian data center market, as global companies seek to comply with these rules.

In addition, India's favorable geographic location and infrastructure are also making it an attractive destination for data center operators. The country has a large availability of land, a high-voltage power distribution network, proximity to submarine cable landing stations, and dense fiber connectivity.

The Indian government is also taking steps to support the growth of the data center industry. The Indian government has announced plans to set up a data center park in Mumbai, which will provide data center operators with access to land, power, and other infrastructure at a discounted rate.

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