Bengaluru: India has emerged as the most attractive market for data centre development among 10 selected Asia-Pacific markets outside China, according to BloombergNEF. Its live IT capacity has quadrupled over the past six years to 1.7 gigawatts (GW), the research firm said.
India scored 73 in BNEF’s assessment, ahead of Indonesia at 68, Japan at 63 and Singapore at 62. The ranking, updated through August this year, assessed markets on energy, land, taxes, fibre connectivity and existing live capacity.
BNEF said India scored strongly on energy availability and fibre connectivity.
The country has 1.3GW of data centre capacity under construction. Another 3.2GW of projects have secured the land, power and permits needed for construction, the report said. Maharashtra remains India’s largest data centre market, accounting for 55% of the country’s live IT capacity. Reliance Industries and the Adani Group have together committed $210 billion to data centre development in India, accounting for 45% of total announced investment, according to BNEF. About 95% of the announced investment is directed at large hyperscale AI campuses. Under BNEF’s Economic Transition Scenario, annual demand is projected to increase more than eightfold, from 11 terawatt-hours in 2025 to 91 terawatt-hours in 2035. Power use will increase as hyperscale capacity under construction comes online over the next three to 10 years, the report said. India’s installed electricity-generation capacity has grown at a compound annual rate of 7.1% since 2021.
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Andhra Pradesh, Gujarat, Karnataka, Tamil Nadu, Telangana and Uttar Pradesh are expected to play a larger role in the next phase of growth as companies announce projects and investments in these states, the report said. BNEF said that without careful planning, transmission constraints could also affect the development of large data centres. Most Indian data centres use air-based systems to cool servers and remove heat, and water is not an immediate constraint, BNEF said.
It also has the largest pipeline of projects that have received the necessary approvals to start construction. BNEF attributed the state’s lead to enterprise demand, cloud infrastructure, subsea cable connectivity and an established network of developers. The expansion is being backed by large investment commitments. India’s data centre electricity consumption is also expected to rise sharply. However, slower expansion of transmission networks has delayed the commissioning of some power projects in the past. It added that facilities using water-intensive cooling systems could, however, increase pressure on local supplies in water-stressed cities such as Bengaluru and Chennai. Download the TOI App.