India Emerges as the Second Largest Data Center Market in APAC After China

New Delhi, August 21: India has emerged as the second-largest data center market in the Asia-Pacific region, following China. Over the past six years, the country’s live IT capacity has quadrupled to 1.7 gigawatts, according to a report released on Friday.

The Bloomberg New Energy Finance (BNEF) report highlights a robust project pipeline for the data center sector in India. Currently, 1.3 gigawatts of capacity is under construction, while approvals for land, electricity, and construction have been secured for an additional 3.2 gigawatts of projects.

The report states, “India’s strong position in energy availability and fiber connectivity makes it a preferred location for establishing data centers in the Asia-Pacific region.”

Maharashtra continues to be the leading data center market in India, holding a 55 percent share of the country’s live IT capacity. The largest pipeline of projects that have secured necessary approvals to commence construction is also located in Maharashtra.

Furthermore, the report indicates that Andhra Pradesh, Gujarat, Karnataka, Tamil Nadu, Telangana, and Uttar Pradesh will play significant roles in the next phase of data center development, as companies announce substantial investments and projects in these states.

Domestic business groups have committed to investing $210 billion in data center development in India, accounting for 45 percent of the total announced investments.

The report mentions that global hyperscale companies like Google, Amazon, and Microsoft are the next largest investor group, having announced investments totaling $84 billion. Approximately 95 percent of the total announced investments are focused on large hyperscale AI campuses.

BNEF anticipates that India’s data center electricity demand will increase from 11 terawatt-hours in 2025 to 91 terawatt-hours by 2035, representing more than an eightfold growth.

The report adds, “With the commissioning of the hyper-scale capacity under construction over the next 3 to 10 years, electricity consumption will rise. Many hyperscaler companies have set net-zero targets by 2030, so an increase in renewable energy usage is also expected.”

To meet the growing demand, India’s established power generation capacity has increased at a compound annual growth rate (CAGR) of 7.1 percent from 2021 to the present.