mb-2">Data: No doubt.. Data is air
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By Business News Desk Published : 20 Dec 2025 04:08 IST Ee Font size
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Data.. Data.. This is a word that is often heard. Data center business in our country is attracting international companies and investments as data usage is likely to increase exponentially in the near future. AI (artificial intelligence), data localization, low latency needs (real time applications like gaming, trading, video conferencing...). These are the main reasons for the phenomenal increase in the demand for data in our country. 

In recent times new data centers are being set up in large numbers in various cities. Huge investments are flowing into this sector. Recently, Crisil Ratings has estimated that there is a possibility of Rs.55,000-60,000 crore investments in data centers in our country in the next two years. Amazon, Google, Microsoft and some other foreign companies and local companies are busy setting up new data centers. 

Data centers have been given the status of 'infrastructure industry' by the central government. This will get discounts and incentives. Electricity supply and availability of human resources will be facilitated. Apart from this, the provision of Input Tax Credit (ITC) has been made in GST for capital assets with the aim of reducing costs. Which item to buy before shopping, which brand is good, how does it compare with other brands...? Latest surveys state that AI is being used more by the consumers in our country. 

  • This is just a small example. In this way, reliance on AI for information related to other departments and topics is increasing day by day and there is no decreasing situation. According to this, many types of AI tools are also becoming available. 
  • Internet usage is only 33.4% in 2019. By the beginning of this year, it had increased to 55.3 percent. Similarly, the monthly average data usage of a user was 11.5 GB in 2019, but now it has reached 32 GB. 
  • With data localization norms there is a need to store data locally. Our country accounts for one-fifth of the data 'generated' worldwide, but the data centers do not have the same level of capacity. Our share of data center capacity in all countries is only 3 percent. 
  • Hence high capacity data centers are required to cope with the growing demand. 
  • Currently there are 280 data centers in our country. The capacity of these centers is 1.2 gigawatts (GW), and this will increase to 8 gigawatts by 2030 with the establishment of new centers, Jefferies recently estimated. 
  • Mumbai, Chennai and Hyderabad cities have high data center capacity. Visakhapatnam will soon join this list.
  • High usage will reap money for data center operators. The data center industry is expected to touch the Rs 20,000 crore revenue mark by FY 2028. 

    • The expansion of data centers is not without its challenges. Data centers require a lot of electricity. By 2030, data centers are expected to consume 3 percent of the country's electricity supply. Currently it is only 1 percent. According to this, it seems that the power efficiency should increase. Apart from this, water requirements also increase a lot. While the main issue is how much water is available, experts are concerned that pollution will arise in the surrounding areas of the data centers and environmental problems will arise. They warn that there is a risk of contamination of ground water. It seems that the expansion of the data center industry depends on finding suitable solutions to these challenges.

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