India's data centre sector is poised for growth, fuelled by a thriving digital economy, widespread internet access, and the shift to 5G networks. The government is prioritizing stable data centre infrastructure and has introduced incentives and a draft policy to encourage investments. However, emerging regulations mandating data localization may impact the demand in the data centre market.

The Indian data centre sector is experiencing rapid growth, with the market expected to reach $7.44 billion in 2023, driven by network infrastructure. India is the 13th largest data centre market globally, hosting 138 data centres, and plans are in place to develop 45 more by 2025. Datacentre businesses in India are set for consistent annual expansion, with a projected 5.84% compound annual growth rate, leading to an estimated $9.27 billion market size by 2027. This growth is fuelled by the IT sector, the digital economy, and the shift to hybrid workplaces, offering significant investment opportunities in top-tier data centre infrastructure and services.

India has a rapidly growing internet user base, with 759 million active users expected to reach 900 million by 2025 surpassing that of USA and China. India is also projected to lead global data consumption.

The Indian government is taking steps to boost data centre investment and expansion by formulating a data centre policy. This policy includes key measures such as incorporating data centres under the Essential Services Maintenance Act (ESMA), establishing Data Centre Facilitation Units (DCFU), creating Data Centre Economic Zones, and introducing a special category code for data centres under the National Building Code of India. These initiatives aim to incentivize and facilitate the growth of data centre infrastructure in the country.

To be a part of India’s Digital growth story – all companies to connect with our Strategic Advisors at VFSL on info@vfsl.net to know about the incentives, policies and Investment support provided by the Government.

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