New Delhi, May 2 (IANS). According to a new report, data center capacity in India is expected to grow nearly 6 times from 1.8 gigawatts (GW) to around 10.5 GW by FY 2031. This growth will be due to the increasing use of Artificial Intelligence (AI) and data localization policies.
Investment bank Morgan Stanley’s report says that AI-related work alone can use about 6.8 gigawatts of capacity. Apart from this, the need to process data in less time, strict data localization rules and increasing computing requirements are also increasing this demand.
The report said that changing global conditions and India’s policies are promoting large investments in the data center sector for many years.
According to the report, there could be an investment of about $60 billion to increase data center capacity. This includes land, power systems, cooling infrastructure and networking equipment.
The report also states that running these energy-guzzling data centers will require an investment of more than $20 billion in the power sector. Also, companies are now moving towards renewable energy and storage solutions.
According to the report, due to rules like data localization, infrastructure status to data centers and government incentives, investment is increasing rapidly and global companies are getting attracted towards India.
“Strategically, storing data in the country increases digital sovereignty, reduces dependence on foreign infrastructure, and allows India to become a regional hub for global tech companies,” the report said.
The report also noted that such rapid expansion comes with some challenges, such as the availability of affordable and reliable power and India’s dependence on imports for high-end computing hardware.
According to Morgan Stanley, about 60 percent of new investment (capex) in India by 2030 will go to the energy, data center and defense sectors.
The report also said that in the coming 5 years, there can be additional investment of about 800 billion dollars in these sectors and by the financial year 2030, India’s investment rate can reach 37.5 percent of GDP.
–IANS
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