Opportunities presented by India’s data centre ecosystem, Pg10

Key Highlights:

• India's data centre value chain is projected to reach a potential order book of $280 billion by 2035, driven by the AI boom and rapid digital transformation.
• Direct investments for building core data centre facilities are estimated at $71.6 billion by 2035.
• India's installed data centre capacity, currently around 1.6 GW, is expected to grow approximately 8.5 times to 13.8 GW or 14 GW by 2035.
• IT equipment, including chips, servers, and networking systems, is anticipated to constitute the largest share of capital expenditure, ranging from $180-210 billion.
• The sector's growth is supported by increasing digitalization, rising internet penetration, and proactive government policies.

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Detailed Insights:

• The rapid expansion of India's data centre industry is fueled by a surge in data consumption, the widespread adoption of cloud services, and various government digital initiatives.
• Government policies such as the Draft National Data Centre Policy (2020), the Digital India program, and data localization mandates under the Digital Personal Data Protection Act (DPDP Act) 2023 are fostering a favorable investment climate.
• The digital economy is a significant contributor to India's GDP, with data centres evolving from mere support infrastructure to a core pillar of this economic growth.
• Global tech giants and domestic players are making substantial investments, reinforcing India's position as a critical hub in the global digital infrastructure landscape.
• While major metropolitan areas like Mumbai, Chennai, Delhi-NCR, Bengaluru, Hyderabad, and Pune currently host most data centres, there is a growing trend towards Tier-II and emerging cities for edge data centres.
• The increasing demand from AI workloads is necessitating advanced infrastructure, including a shift from traditional air-cooled systems to more efficient liquid cooling technologies.
• Challenges include ensuring reliable power infrastructure and reducing dependence on imports for critical mechanical, electrical, and plumbing (MEP) components.
• A strong emphasis is being placed on sustainability, with efforts to integrate renewable energy sources and implement energy-efficient practices in data centre operations.

Key Concepts Involved:

• Data Centre: A centralized facility housing computing, storage, and networking infrastructure essential for IT operations and digital services.
• Artificial Intelligence (AI): Advanced computing systems designed to simulate human intelligence, requiring significant computational power and specialized infrastructure.
• Digital Transformation: The comprehensive integration of digital technology into all aspects of society and business, fundamentally changing operations and service delivery.
• Data Localisation: A regulatory requirement mandating that certain types of data be stored and processed within the geographical boundaries of the country where they originate.