KPMG Urges Integrated Lifecycle Approach for India's Data Centre Growth

A KPMG report emphasizes the need for India's data centre industry to adopt integrated lifecycle partnerships. Combining engineering, AI infrastructure, regulatory expertise, and financial structuring, these partnerships are essential to handle the sector's growth challenges driven by digital expansion, 5G adoption, and data localization demands.

India's burgeoning data centre industry needs to transition beyond its current fragmented service structure, advocating for a holistic lifecycle partnership approach. According to a KPMG report, integrating engineering, AI infrastructure, regulatory acumen, and financial structuring is critical for propelling the sector into its next phase of growth.

The report highlights the rapid expansion of India's digital infrastructure, influenced by stringent data localization mandates, burgeoning AI applications, and widespread 5G technology adoption. These trends underscore the urgency for data centres to offer end-to-end integrated services rather than isolated operations.

KPMG identifies the primary challenge as the complexity in efficiently scaling the infrastructure. Current disjointed models involving separate entities for construction, cooling, technology, and operations lead to inefficiencies and delays. The report suggests adopting an 'Integrated Lifecycle Partner' model, covering all stages from planning to maintenance under one umbrella.

Furthermore, the report underscores the importance of AI-ready infrastructure, like liquid cooling systems, to support GPU-driven AI workloads. As the regulatory landscape evolves under the Digital Personal Data Protection Act, data centres must enhance compliance capabilities concerning land acquisition, power agreements, and government procurement norms.

Sustainability and ESG compliance are pivotal for attracting foreign investments. With data centres known for high energy consumption, KPMG emphasizes the critical role of efficient power usage and renewable energy agreements. The industry could see revenues reaching USD 45.69 billion by 2033.

The opportunity is significant yet time-sensitive, as the market may undergo consolidation by 2030. Companies combining engineering prowess, AI readiness, regulatory expertise, and financial structuring into a singular model are poised to lead India's digital infrastructure evolution.