India's Data Centre Surge: Powering the Future

India's data centre capacity is on the rise, projected to reach 2,000-2,100 MW by 2027. This growth is fueled by data demands and localization efforts. Investments of Rs 2-2.3 lakh crore from Indian DC players are expected as regulatory measures and technological trends like AI drive expansion.

India is set to increase its data centre operational capacity to between 2,000 and 2,100 MW by March 2027, a significant rise from the current 1,150 MW recorded in December 2024. ICRA, the rating agency, attributes this growth to heightened data use and localization initiatives.

Expected investment from Indian data centre players ranges between Rs 2-2.3 lakh crore, with 3-3.5 GW of development likely over the next seven to ten years. AI demands are already spurring large transactions (>300 MW) on the global stage, a trend India is ready to emulate.

Regionally, cities like Mumbai and Chennai, both prime locations due to their numerous landing stations, are witnessing concentrated data centre development. ICRA warns, however, that increased competition among the growing number of developers may extend payback periods as negotiation power shifts towards hyperscalers.