Expanding digital advancements shaping India's infrastructure landscape
India, with its vast population of over 1.15 billion wireless subscribers and more than 500 million internet subscribers, holds the second-largest share of the world's internet users. This burgeoning digital landscape has caught the attention of global investors, especially in the realm of digital infrastructure.
The Indian data center market has been on an upward trajectory since 2013, doubling in size, and is expected to continue growing in the next four years. This growth is driven by various factors, including the government's focus on digital India and data localization, as well as the increasing demand from hyperscalers like Google, AWS, and Microsoft.
The Datacloud India & Edge Forum 2020, held in Mumbai, was a platform for discussing the value of investing in India's data center, colocation, cloud, Edge, and IT infrastructure. Sander Mutsaers, Telecom Infrastructure Banker for Asia Pacific, was among the speakers at this event.
International investors, such as Bain, Warburg Pincus, and I-squared, have been actively investing in India's digital infrastructure, joining local promotors and conglomerates like the Adani Group with Digital Realty and Jio with Microsoft. Global firms like Equinix have also shown interest, investing $69 million in an AI-ready data center in Chennai.
However, investing in India's digital infrastructure isn't without its challenges. Power supply issues, fiber availability and connectivity, and long lead times to secure land are potential hurdles that investors may face. Yet, despite these challenges and a supply shortage, pricing remains very competitive in India.
Policy reforms and initiatives like the UK-India Infrastructure Financing Bridge (UKIIFB) are attracting multinational corporations and 'patient capital' for large-scale projects. These efforts are aimed at ensuring sustainable infrastructure investment and improving connectivity and services to an underserved market in India.
The e-commerce sector in India is expected to grow in excess of USD200 billion by 2026, further fueling the demand for digital infrastructure. Greenfield projects like Rackbank target the pure hyperscale market in India, promising to meet the growing demand.
The government of India is also playing a significant role in this growth. With a target of achieving a USD5tn economy by 2025, the digital economy is one key pillar in its bid to reach this milestone. The government is working to create an enabling environment for digital infrastructure development, which will lead to further data center demand.
In conclusion, the macro trends for increased investment in digital infrastructure in India are very positive. The Indian data center market presents a lucrative opportunity for both international and local investors, offering a promising landscape for growth and development.
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