A peep into the world’s second-largest, internet-hungry market throws some impressive numbers and its implications.

• Indians consume ~1500 GB data every second as per the latest published data
• Average cost of the data is US$0.17 per GB – the cheapest daily necessity
• Personal Data Protection Bill – under consideration
• Laws for data localisation – being discussed

India’s wireless data subscribers grew by 20% y-o-y between 2014 and 2018 to reach 578 million. This unprecedented growth of data consumption and generation created the need for data centres to store and maintain this vast resource. Currently, the data centres across the globe are meeting these storage needs. However, for the growth of the Data Centre industry in India, the tipping point is the legislation on personal data privacy rights.

Data has become the new resource, which is not only valuable but also needs to be protected and used wisely. Therefore, it is imperative to device necessary laws to protect personal information and its storage. The draft Personal Data Protection Bill, draft e-Commerce Policy and the Reserve Bank of India’s Central notification on the local storage of payment data – all these developments point towards the requirement for local storage of data. The scenario spells a significant opportunity for Indian data centres or colocation industry. JLL research believes that data localisation is likely to be a major driver for the domestic industry over the next five years. The sector which added 350 MW[1] in the last 20 years, is expected to add ~431 MW in the next five years.

Figure 1: Industry revenues to triple by FY 2023-24

Source: JLL Research

Revenue of India’s data centre industry is expected to reach US$3.2 billion by 2024. This will lead to an additional need for 9.0 million sq. ft. of real estate space over the existing 8.9 million sq. ft., occupied by domestic data centres. Mumbai and Chennai will account for 72% of share of these new capacity additions.

In our ‘connected’ world driven by the Internet, increasing speed, lower latency and falling costs are leading to more unique applications every day. The advent of 5G is set to unleash a fresh wave of change that will redefine many industries. India’s domestic data centre industry is thus expected to benefit from the increasing use of data in areas like over-the-top media services and e-commerce. New emerging areas like Internet of Things (IoT), industrial IoT, healthcare and connected devices will provide additional growth.

The prospects offered by the Indian data centre industry have attracted global players as well as investors who have already invested US$582 million in the last decade. The new capacity addition of 431 MW is expected to provide a new investment opportunity of US$4 billion. The Indian data centre industry is set for an exciting growth phase providing new opportunities for the real estate sector.

[1] IT power load

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