India's Data Centre Capacity Projected to Increase Sixfold by 2031
India's data centre capacity likely to surge nearly six‐fold to 10.5 GW by FY31
The Economic TimesImage: The Economic Times
India's data centre capacity is expected to increase from 1.8 GW to 10.5 GW by FY2031, driven by rising demand for artificial intelligence and data localisation. An estimated $60 billion investment is projected for infrastructure, with a significant focus on renewable energy solutions.
- 01Data centre capacity in India is set to grow nearly sixfold by FY2031.
- 02AI workloads are projected to account for 6.8 GW of the new capacity.
- 03An investment pipeline of around $60 billion is anticipated for data centre infrastructure.
- 04Policy measures are enhancing digital sovereignty and attracting global investment.
- 05Challenges include the need for reliable power and dependence on imported computing hardware.
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India's data centre capacity is projected to expand significantly from 1.8 GW to approximately 10.5 GW by FY2031, according to a report by Morgan Stanley. This surge is largely attributed to the increasing demand for artificial intelligence (AI) and data localisation policies, with AI workloads expected to contribute around 6.8 GW to this growth. The report highlights a projected $60 billion investment in infrastructure, focusing on land, power systems, cooling infrastructure, and networking equipment. To support these energy-intensive facilities, over $20 billion will be needed for the power ecosystem, with a shift towards renewable energy sources. Additionally, policy measures such as data localisation and fiscal incentives are fostering capital formation and attracting global technology firms to India. However, the report also mentions challenges, including access to reliable power and reliance on imported high-end computing hardware. Overall, the anticipated increase in data centre capacity positions India as a regional hub for cloud and digital services, with an expected cumulative capital expenditure of $800 billion in related sectors over the next five years.
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The expansion of data centres will create job opportunities and enhance digital services in India, benefiting businesses and consumers alike.
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