South India’s Data Centre Market to Witness 65% Growth by 2030, Poised to Become Global Hub

The data centre market in South India, powered by the cities of Chennai, Bengaluru, and Hyderabad, is projected to experience a significant growth of 65% by 2030, according to a recent report by Colliers India. This growth is anticipated to be propelled by substantial government incentives, strategic infrastructure investments, and a rising demand for digital services.

The combined installed data centre capacity in these three cities currently stands at nearly 200 MW. However, this foundation is set to be significantly bolstered with 190 MW currently under construction and an additional 170 MW planned. These developments are expected to increase the total capacity by 80% over the next few years, underscoring the region’s strategic importance in supporting global digital infrastructure.

Swapnil Anil, Executive Director & Head of Advisory Services at Colliers India, emphasized the potential of South India in becoming a global data centre hub. He stated, With sustained government support and continuous infrastructure development, South India is set to become a global data centre hub.

Chennai, one of the key cities driving this growth, currently has an installed capacity of 87 MW, with 156 MW under construction and 104 MW planned. Bengaluru, leveraging its strong IT ecosystem, has an installed capacity of 79 MW, with 10 MW under construction and 26 MW in the planning stages. Hyderabad, rapidly emerging as a data centre hotspot, has an installed capacity of 47 MW, with 20 MW under construction and 38 MW planned.

The report also highlighted the competitive pricing of data centres in South India. The monthly recurring charges range between Rs 6,650 – Rs 8,500 per kW per month, offering significant value for money. This competitive pricing, coupled with the region’s strategic importance and the government’s supportive stance, makes South India an attractive destination for data centre investments.

The growth of the data centre market in South India is not an isolated phenomenon. It is part of a broader trend of digital transformation sweeping across the country. The ease of doing business, simplified regulatory frameworks, and expedited approval processes are reducing bureaucratic hurdles and encouraging swift project initiation and completion.

Moreover, the integration of advanced technologies such as artificial intelligence (AI) and machine learning (ML) in various sectors is revolutionizing industries and driving the demand for data centres. For instance, the use of computer vision systems in grain inspection, which uses advanced imaging techniques and ML algorithms, is becoming increasingly popular. These systems require robust data centres for efficient operation.

The retail sector is also witnessing a shift towards digital platforms. Brands are aggressively pursuing their own strategies to woo customers. Direct-to-Consumer (D2C) brands like IGP, Zouk, Solethreads, and The Tribe Concepts are ramping up their offerings, building their inventory as well as increasing tech capabilities and marketing functions. This shift towards digital platforms is expected to further drive the demand for data centres.

The data centre market in South India is poised for significant growth in the coming years. The combination of government support, strategic infrastructure investments, rising demand for digital services, and competitive pricing makes the region an attractive destination for data centre investments. As digital transformation continues to sweep across various sectors, the demand for robust and efficient data centres is expected to rise, further bolstering the growth of the data centre market in South India. This growth trajectory underscores the region’s strategic importance in supporting global digital infrastructure, positioning South India as a potential global data centre hub.