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India's Data Center Capacity to Double in Next Three Years: CRISIL

India's data center capacity is poised for significant growth, more than doubling in the next three years, as reported by The Week, citing a CRISIL research. This surge is driven by soaring data consumption fueled by consumer demand and substantial industry investments in cloud and storage infrastructure.

Currently boasting over 950 MW of capacity, India's data center landscape is projected to exceed 2 GW by fiscal year 2027. This substantial expansion is expected to be further accelerated by the growing adoption of Generative Artificial Intelligence (GenAI), which demands significantly higher computational power. For instance, a typical ChatGPT query consumes ten times more electricity than a traditional Google search.

CRISIL's analysis, encompassing industry players representing 85% of the market share based on operational capacity, reveals a robust demand for computing and storage infrastructure. This is driven by businesses increasingly migrating data to digital platforms, including the cloud, coupled with widespread adoption of high-speed internet services.

The rapid development of GenAI, characterized by its need for greater computational power and reduced latency compared to conventional cloud computing, is further driving up demand for data centers.

To accommodate this projected growth, CRISIL senior director Manish Gupta estimates that an additional Rs 65,000 crore in investment will be required over the next three years. This capacity expansion will involve both expansion plans by existing players and the emergence of new entrants in the market.

"The capacity additions are driven by expansion plans of the existing players as well as the entry of new players," The Week reports.