India’s infrastructure makes it the preferred location for data center operations: Reports

New Delhi [India]March 29 (ANI): India can be the preferred data center center due to a number of factors, including improved cross-border connectivity (increasing sub-sea cable logins), lower capital and operating costs (including utilities and human resources), JM Financial said in a report.

The financial consulting firm also asserted that India’s strategic position between the Middle East and Southeast Asia gives the country an advantage in this field.

JM Financial released this week that demand for data centers is rising in India.

JM Financial Report asserted: “The factors that fuel the upward trend are both structural and cyclical. A large group of Internet users generates data, and government data localization drives and AI are some structural headwinds.”

Although India’s data center business is growing, the share of data centers is low.

Although India generates 20% of global data, it accounts for only 5.5% of global data capacity and adds slower capabilities, JM Financial said.

These mismatches that make demand mismatch attract, ushering in a cyclical boom in capacity expansion, the report said.

As of 2024, India’s co-existing data center capacity was 1.35 gw, a year-on-year increase of 38%. Nevertheless, India’s data center density is one of the lowest in the world.

“We estimate that by 2030, India’s total capacity will be 5 GW, which will reach 50% of China’s DC density,” the report said.

This is consistent with the currently announced unconstructive and the planned capacity of 3.3 GW by 2028.

The report predicts that data center capital expenditure will be huge in the coming years.

“While most cloud infrastructure spending will be done by high standards, in our opinion, capital expenditure alone moves toward data center capacity ($20 billion), which could lead to $10 billion in equity issuance,” it said.

It noted that nonetheless, these will only meet the domestic demand of India. Given the opportunities in this emerging industry, JM Financial expects to propose more companies listed on the stock market in the next 5 years.

“Given the capital-intensive nature of this segment, we expect many domestic operators to list access to capital. The initial investment opportunities can be concentrated on the upstream value chain…there will be a handful for investors.”

A data center is a physical facility that an organization uses to accommodate its critical applications and data.

The data center is designed based on a network of computing and storage resources that can deliver shared applications and data. Key components of data center design include routers, switches, firewalls, storage systems, and servers. (ANI)