India Becoming a Big Data Centre Market

According to a report by Nasscom, the Internet penetration in India witnessed a significant increase to 50 per cent in January 2020
  • BY Jaspreet Kaur

    Feature Writer, BusinessEx

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  • Feb 04,2021
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  • 12 Mins Read

India's data economy increased substantially over the years. According to a report by Nasscom, the Internet penetration in India witnessed a significant increase to 50 per cent in January 2020 with the number of active internet users increasing 3X13 over 2015, with both urban and rural areas contributing to this growth. 

Increasing internet penetration, augmenting cloud adoption, IoT, surging cases for AR/VR, AI/ML, and edge computing along with the government digitisation initiatives are prime areas driving the growth of the country’s data economy. The data-centered arena received stimulus from the government through its data localization policy. Even, the budget 2020 allocated INR 8,000 crore under the National Mission on Quantum Technologies and Applications along with RBI's aim of tenfold growth in digital transactions served as an impetus for increased data consumption.

As per the cited report, India has the second largest internet user base globally, which has further accelerated post the pandemic as more number of people moved online and small businesses digitised. The country had an internet subscriber base of 749.1 as of June 2020, which is expected to cross 1 billion by 2025. This has led to an increase in the amount of data generated and consumed. Indians consumed the highest amount of data per month at approximately 12GB in 2019, globally, which is expected to double over the next five years.

Infusions in the country’s data centre market is reportedly going to reach $5 billion by 2025. It is inclusive of over 80 third-party data centers at present and is going to receive investments in around 15 projects annually. Here are some findings of the report:

  • Mumbai, Bengaluru, Chennai, Delhi (NCR), Hyderabad and Pune are the key cities accounting for the majority of the data centres. Calcutta, Kerala and Ahmedabad are the upcoming destinations. 
  • India has a growing presence of global datacentre operators such as NTT Global Data Centers (Netmagic Solutions) and ST Telemedia Global Data Centres (India), Colt DCS, Equinix and Digital Realty (in partnership with Adani Group)
  • The market also has a strong presence of local service providers such as CtrlS, ESDS Data Center Solutions, RackBank, Pi Datacenters and BSNL (Nextgen Infinite), NGBPS, WebWerks, Airtel (Nxtra Data Centers), Sify Technologies

Data Consumption--Advantageous for India 

The increased penetration of the Internet is somewhat advantageous for the country. Here are some of the merists: 

  • Various infusions in data centers are for Tier IV standards (the highest rating in data centre standards), certified by the Uptime Institute. Some of the top-notch companies are Yotta Infrastructure Solutions, GPX Global Systems (Equinix) and Pi Datacenters.


  • According to the cited report, skilled workforce is among the major site selection criteria for data centre development and operations. Engineering skill shortage is a major challenge in developed data center markets like North America and Western Europe, where it is a benefit for India to position itself as a major data centre hub.


  • The country has a huge data consuming market, a growing submarine cable connectivity system, and a fairly stable geography (with most cities not prone to frequent earthquakes/other natural disasters). These factors coupled with the increasing shift towards cloud makes India a hotspot for data centres. Building data centers in new tier-2 cities where internet use is booming is also a strategic business move, as it would help in easing congestion and speed up internet services, creating increased opportunities for edge data centers in the country.
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