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India’s colocation data centre (DC) industry is expected to double by 2023, according to JLL. The global real estate firm expects capacity to increase from 499 megawatts (MW) IT load in H1 2021 to 1008 MW by 2023. This, in turn, would lead to a requirement of over five million sq. ft of real estate, as per JLL research.

Mumbai and Chennai are expected to be leading DC hubs due to assured power supply, undersea cable landings and large user markets. One of the biggest enablers for the growth will also be the approval of the draft Personal Data Protection Bill by the joint parliamentary committee, which JLL believes will represent a major milestone for India’s colocation DC industry, which largely provides IT infrastructure for storage and computing requirements.

“The importance of information in form of data has gained prominence over the years with the entire digital revolution being driven by the usage of data. The colocation industry is expected to benefit from the legislation due to the prerequisite for data storage in the country. The potential of the industry is evident from the fact that three central legislations and four states have enacted data centre sector policies while four more states are in the process of notifying their policies," said Rachit Mohan, head, Data Center Advisory – India, Co-Head, Office Leasing Advisory – Mumbai, JLL.

The Central Government has outlined the importance of the sector by formulating a Data Centre Park Policy and the creation of four Data Centre Economic Zones that aims to make India the global DC hub. The draft policy aims to accord “infrastructure" status to the sector bringing in the benefits of availing long-term credit from domestic and international lenders.

“The increasing digital economy has also necessitated regulations to protect the right of Indian users by storing the details of the digital transaction locally. The Reserve Bank of India has issued a directive imposing data localisation requirements on service providers/intermediaries / third-party vendors and other entities in the payment ecosystem. The financial regulator has issued various directives for financial intermediaries to comply with the localisation provisions. The local storage of digital transactions has already led to an increase in demand for data centres from the BFSI sector," said Samantak Das, chief economist and head of Research & REIS (India), JLL.

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