Manoj Paul, Assocham Data Centre Council Co-Chair and MD at Equinix India, sits down with BW Businessworld to unpack how homegrown players are matching global scale, the widening geographic corridors beyond traditional hubs, and the regulatory catalysts that are positioning India as a global powerhouse for cloud and AI compute capacity. Excerpts:
With hyperscalers like AWS, Google, and Microsoft pouring billions into India, where do homegrown data centre players stand? Are they relegated to being mere infrastructure providers, or are they a core part of the technology conversation?
In cloud and AI deployments, hyperscalers bring their own infrastructure but heavily rely on third-party co-location services, whether homegrown or international providers like Equinix or NTT. Domestic players play a highly comparable role in this ecosystem.
Hyperscalers only build a fraction of their capacity themselves; the rest is outsourced to third-party data centres. Homegrown players are rapidly building capacities to meet this massive co-location demand. Furthermore, the government anticipates new Indian deployments will cater not just to domestic needs, but to regional and global customers as well. Local players are fuelling a massive portion of this expanding pie.
As India pushes for data sovereignty and digital self-reliance, do homegrown and international data centre players approach this narrative differently?
No, the role is close to identical. Data sovereignty ensures that necessary infrastructure and data remain within India so the country can function independently even during international network disruptions.
With the Digital Personal Data Protection (DPDP) framework, the government is clear that processing for Indian operations and consumers should happen locally. Both international and local infrastructure providers share this exact responsibility—reducing dependency on external nations by keeping data processing within our borders.
India is among the fastest-growing data centre markets globally. Beyond the anticipation of AI, what macroeconomic tailwinds are driving this momentum?
First, AI deployments are already active across the country and driving massive capacity demands. Combined with the Finance Minister’s recent tax holiday for infrastructure serving global clients from India, there is a strong expectation that significant international AI compute and storage demand will shift here. Second, the structural tailwinds backing this growth are immense, starting with a powerful domestic demand driven by India’s position as the world's fastest-growing major economy coupled with rapid digital adoption across both consumers and enterprises. This is further amplified by a stark underpenetration, as the country’s current data centre footprint remains very small relative to its massive population and economic scale.
Additionally, India offers remarkable cost efficiencies, featuring some of the world’s lowest construction costs, often 55 to 60 per cent cheaper than other global markets, alongside lower operational and power costs, especially when paired with solar energy. These dynamics are reinforced by increasingly localised supply chains, as major components like UPS systems, transformers, and generators are now manufactured locally, which slashes shipping times, cuts logistics costs, and builds immediate, localised technical expertise for troubleshooting. Ultimately, while other nations are actively discouraging data centre expansion due to resource constraints, Indian state and central governments continue to aggressively support it.
Most Indian data centres are concentrated in the Mumbai-Chennai-Bengaluru triangle. How is the expansion shifting toward tier-two cities and other regions?
The primary hyper-scale corridor is shifting to include Mumbai, Chennai, Hyderabad, and now Visakhapatnam, with Hyderabad seeing massive multi-megawatt builds from AWS and Microsoft. Other hubs continue to serve distinctly different purposes; for instance, Bengaluru functions primarily as an enterprise market, experiencing steady, incremental growth measured in kilowatts rather than massive hyperscale megawatt leaps. Meanwhile, demand in Delhi has temporarily saturated but is expected to pick up, and while Kolkata has seen investments, hyper-scale demand there has not yet exploded.
Looking at tier-two and tier-three cities, regions like Indore, Raipur, and Patna are actively trying to attract investments. While edge data centres are certainly needed for delay-sensitive applications, analysis shows that 90 per cent of India’s population can actually be served within an acceptable 10 to 20 millisecond latency from just three or four major metros. Ultimately, substantial growth in these tier-two cities happens when a hyperscaler anchors a market to leverage cost advantages like cheap land or power, creating a gravity that pulls other players to that region.
What core policy interventions is Assocham currently advocating for to accelerate this ecosystem?
First, we are working with MeitY on the implementation guidelines for the tax holiday. We are urging the government to keep it simple. Do not tie the tax holiday to complex mandates like job creation or specific megawatt thresholds. It should apply uniformly to any foreign cloud provider utilising Indian data centres to serve global clients. It is about ease of doing business; the economic ripple effects will follow naturally.
Second, we still advocate for a comprehensive central data centre policy to serve as a standardised guideline across all states.
Third, we are engaging with state bodies like Maharashtra Industrial Development Corporation (MIDC) and State Industries Promotion Corporation of Tamil Nadu
(SIPCOT) to establish dedicated data centre parks. Government-led land acquisition removes the legal risks and transparency issues associated with private land transactions.
Finally, we are collaborating with power distribution companies. Data centres are highly lucrative, steady, and creditworthy consumers for power utilities. We are pushing for targeted investments to fund power infrastructure in key corridors. On our end, the industry is prioritising sustainability. |
