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India’s data centre market requires Rs 23,000 crore investment in 3 years to meet demand: JLL

With the COVID-19 pandemic raging, businesses are looking to adopt cloud servers as work-from-home becomes the new normal. As a result, the demand for data centres has increased as cloud adoption and digitisation grows. But to meet this rising demand, India will require an investment of Rs 23,174 crore in data centre infrastructure over the next three years, real-estate advisory firm Jones Lang LaSalle said in a recent report.

“India’s data centre industry is expected to add 560 MW [megawatts] during 2021-23 leading to a real estate requirement of 6 mn sq ft… Rising demand is leading operators to pursue ambitious expansion plans, while some are adopting the acquisition route to enter Indian markets,” said Dr Samantak Das, Chief Economist and Head of Research & REIS (India), JLL. This translates to the doubling India’s existing data centre capacity from 447 MW at present to 1007 MW by 2023, the report said.

Mumbai and Chennai are expected to drive 73% of the sector’s total capacity addition during 2021-23, while other cities like Hyderabad and Delhi NCR will emerge as new hotspots, said Rachit Mohan, Head, Data Center Advisory (India), JLL said. Currently, the demand has also led to an increase in the absorption of colocation data centres — a data centre facility in which a business can rent space for servers and other computing hardware. In 2020, the country’s colocation data centre witnessed an “unprecedented” absorption of 102 MW 2020, he said.

The report stated that this figure was higher than most key markets in the United States and European markets. Within the country, Mumbai had the highest rate of absorption of data centres at 57.5 MW, followed by Pune 19.0 MW, Chennai 16.0 MW, Hyderabad 4.5 MW, Bengaluru 2.5 MW, Delhi 1.7 MW and Kolkata 0.4 MW. “While some (datacenter operators) adopted the acquisition route to enter Indian markets, which we expect to continue. Colo capacity grew by around 28% to reach 447 MW in 2020 from 350 MW in 2019,” Das said.

The report said the increasing usage of e-commerce, EdTech and digital transactions placed the existing IT infrastructure of enterprises under pressure. Quoting the Nokia Mobile Broadband India Traffic Index 2021, JLL said, overall data usage increased by 36 per cent in 2020 due to increased usage of smartphones and fixed wireless access.

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