India's data centre industry is rapidly growing, especially in Tier-2 and Tier-3 cities like Kochi, Jaipur, and Ahmedabad. Major players such as Reliance Jio, Bharti Airtel, and Adani Enterprises are leading this expansion, capitalising on strategic benefits such as improved infrastructure, lower costs, and enhanced network resilience. Data centre capacity surged from 350 MW in 2019 to 864 MW in 2023, reflecting a 25% CAGR. The government's Digital India initiative further drives this trend by boosting digital infrastructure and connectivity, contributing to local economic growth and decongesting metropolitan areas while supporting the rise in digital service demands.
India's data centre industry is witnessing substantial growth, particularly in Tier-2 and Tier-3 cities. Major companies like Reliance Jio, Bharti Airtel, and Adani Enterprises are spearheading this expansion. Emerging hotspots include cities such as Kochi, Jaipur, Ahmedabad, Lucknow, Patna, and Visakhapatnam. These locations are gaining attention due to their strategic advantages and improved infrastructure, which includes better transportation, reliable power supply, land availability, and cost-efficiency.
Leading firms like Airtel's Nxtra, NTT, and CtrlS are prioritising these smaller cities for their data centre developments. The industry's capacity has surged from 350 MW in 2019 to 864 MW in 2023, marking a compound annual growth rate (CAGR) of 25%, according to JLL data. These cities offer not only economic benefits but also enhanced network resilience.
The push towards smaller cities is expected to continue as companies leverage the strategic benefits, ensuring robust and resilient data infrastructure to support increasing demands for digital services in areas like e-commerce, healthcare, and education.
Overall, the industry's expansion into smaller cities is a strategic move aimed at boosting economic benefits, improving infrastructure resilience, and meeting the rising demand for digital services across India.
The government's Digital India initiative aims to enhance digital infrastructure and increase internet connectivity across the country. This initiative has driven the need for more data centres to handle the growing data traffic. The development of data centres in Tier-2 and Tier-3 cities is contributing to local economic growth by creating jobs and improving infrastructure. This shift also helps in decongesting metropolitan areas.Smaller cities offer several strategic advantages for data centre operations, including lower land and labour costs, reduced risk of natural disasters compared to coastal areas, and proximity to large user bases in regional markets.
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