India’s data centre market, valued at $7 billion in 2023, is projected to grow at a compound annual growth rate (CAGR) of 8% to reach $8 billion by 2025, according to a report by 1Lattice, a tech-enabled market intelligence firm. The report also predicts that the country’s data centre capacity will increase from 1,150 MW in 2023 to 1,700 MW by 2025, with an impressive growth rate of 22%. Major hubs like Mumbai, Delhi-NCR, and Bengaluru account for over 55% of the nation’s data centre capacity, primarily driven by colocation services.
“The surge in data consumption, the rise of emerging technologies, and strong government support are propelling India to become one of the fastest-growing data centre markets globally,” said Abhishek Maiti, Director of Technology and Internet at 1Lattice. Government initiatives such as the ‘Data Centre Incentivization Scheme’ and ‘Make in India’ are playing key roles in fostering this expansion.
Maiti further highlighted that investments in infrastructure, technology, and sustainability will be pivotal in transforming the sector. On a global scale, the data centre market is expected to grow from $227 billion in 2023 to $250 billion by 2025, fueled by increasing adoption of cloud computing, edge technologies, and AI/ML.
India has the potential to add another 500 MW of data centre capacity in the next four years. Between 2019 and 2023, the country’s data centre capacity nearly doubled, rising from 540 MW to 1,011 MW, marking it as one of the fastest-growing markets worldwide. In the first half of 2023 alone, data centre absorption increased by 21%, driven by rising demand for edge data centres in tier 2 and 3 cities.
