Introduction
India’s data centre sector continued its rapid growth trajectory in 2024, bolstered by heightened digital adoption, expanding cloud services, and robust government initiatives supporting digital infrastructure. According to the latest CBRE Research India report, the market exhibited strong momentum, with both established players and new entrants announcing ambitious expansion plans and keen investor interest.
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Surge in Colocation Demand
A notable driver of this growth is the surge in colocation requirements. As businesses across sectors—from e-commerce to healthcare—increasingly lean on cloud-based services, data centre providers are expanding rack capacity and focusing on operational efficiency. This has positioned India as a preferred destination for hyperscale data centres, especially among global technology giants aiming to tap into Asia’s rising digital consumer base.
Image: India’s cumulative DC investments (2019 – 2027E)
Geographical Expansion
While Mumbai, Chennai, and Bengaluru remain at the forefront of India’s data centre ecosystem, other cities like Delhi-NCR, Hyderabad, and Pune are steadily gaining traction. Factors such as availability of reliable power sources, growing connectivity networks, and government incentives have contributed to this diversified growth, reducing reliance on a handful of metropolitan hubs.
Image: Occupancy levels in established DC markets in India (9M 2024)
Technological Innovations
The year also saw the rapid adoption of edge computing solutions that bring processing power closer to end-users, minimizing latency and improving user experiences. Coupled with advancements in artificial intelligence and machine learning, data centre operators are modernizing infrastructure to handle the sophisticated computing needs of emerging technologies.
Regulatory Environment and Sustainability
Policy interventions—such as updated data localization norms—continue to shape the direction of infrastructure development. These policies not only ensure data sovereignty but also open new avenues for local investment. Moreover, sustainability is becoming central to data centre strategy, with operators prioritizing green energy adoption and energy-efficient designs to appeal to both regulators and environmentally conscious consumers.
Outlook
In the near to mid-term, the Indian data centre market is expected to remain on a strong growth path. The consistent demand for colocation facilities, along with policy support and a surge in digital services, suggests a dynamic landscape ripe with opportunities. Players focusing on sustainable operations, geographic expansion, and cutting-edge technology integration are likely to emerge as frontrunners in India’s evolving data centre ecosystem.
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