By Ian Shearer, Managing Director, APAC & EMEA, Park Place Technologies
India’s expanding submarine cable network enables its data centres to serve not only domestic demand but also neighbouring regions across South Asia, Southeast Asia, and the Middle East, says Ian Shearer, Managing Director, APAC & EMEA, Park Place Technologies. Here, he discusses why the country is on its way to be Asia’s next data centre powerhouse.
India is rapidly emerging as one of the most attractive investment destinations for global data centres, positioning itself as a strategic hub in the Asia-Pacific region. The rapid pace of digital transformation, the widespread adoption of cloud services, and the growing influence of artificial intelligence (AI) are fuelling unprecedented demand for reliable and scalable data infrastructure.
India’s Strategic Advantage as a Data Centre Hub
One of India’s key strengths as a data centre hub is its cost advantage. Compared to developed markets such as Singapore, Hong Kong, and Japan, India offers significantly lower operational costs and real estate prices. Land and construction costs in Tier-1 cities are far more economical, making them attractive entry points for international investors.
Power tariffs, one of the biggest operational expenses, are also relatively favourable. Expanding access to renewable sources such as solar and wind allows operators to manage costs effectively while meeting the sustainability commitments expected by global clients.
The Indian government has actively enabled a supportive ecosystem. By granting data centres “infrastructure status,” it has expanded financing options, while incentives such as tax breaks, subsidies, and special economic zones (SEZs) add further value. This combination of low operating costs and supportive policies provides India a distinct edge over saturated, high-cost markets in the Asia-Pacific region.
India’s data centre capacity is expanding rapidly, especially in Tier-1 locations such as Mumbai, Chennai, Hyderabad, Bengaluru, and Delhi-NCR. Mumbai in particular has become a focal point of financial activity and connectivity, supported by multiple submarine cable landing stations. Cities like Chennai and Hyderabad are quickly following suit with enterprise demand, better connectivity, and hyperscale expansion.
Equally important is the nation’s expanding submarine cable network, which strengthens India’s connectivity with global markets. This backbone enables Indian data centres to serve not only domestic demand but also neighbouring regions across South Asia, Southeast Asia, and the Middle East.
India also benefits from its vast pool of skilled IT and engineering talent. The country has a long history of producing competent professionals with the technical expertise required to run and scale complex data centre operations. Global hyperscalers such as Amazon Web Services, Microsoft Azure, and Google Cloud, along with leading colocation providers have already built and expanded operations in India.
Domestic demand adds another layer of strength. The surge of OTT platforms, fintech innovation, online gaming, and e-commerce is driving exponential data usage. Each year, millions of new internet users come online, fuelling the need for robust local infrastructure. Data localisation laws further accelerate this trend, requiring businesses to store specific categories of data within national borders and increasing the urgency to scale domestic storage capacity.
Geographically, India enjoys a strategic position. Serving as a digital bridge between South Asia, the Middle East, and Southeast Asia, it offers clear advantages in regional connectivity. Combined with the rapid rise of AI, IoT, 5G, and edge computing, India is well-placed to develop specialised, high-performance data centres that meet next-generation digital needs.
Challenges and the Road Ahead
Despite these advantages, India must address several challenges to fully realise its potential. Power reliability remains a concern. While renewable energy adoption is increasing, grid stability is uneven, and operators often rely on diesel backup in some areas.
Policy clarity and faster approval procedures are equally important. Overlapping regulations between state and central governments can delay projects, making streamlined processes crucial to sustaining investor confidence.
India also faces competition from emerging markets such as Indonesia and Malaysia, which are positioning themselves aggressively as data centre destinations. Additionally, climate risks such as high heat and water usage for cooling present challenges that will need sustainable solutions.
Looking Ahead
India stands at a pivotal moment in the evolution of its digital infrastructure. Its unique combination of cost efficiency, skilled talent, growing domestic demand, and supportive policy creates strong momentum for growth. However, consistent investment in renewable energy, resilient infrastructure, and workforce development will be essential.
Third-party data centre and hardware optimisation partners also play a critical role by improving efficiency, extending asset lifecycles, and lowering operational costs. Their contributions further strengthen India’s competitiveness as a future-ready market.
With the right balance of policy support, infrastructure investment, and sustainability practices, India can cement its position as the backbone of Asia’s digital economy. Cost-effective, scalable, and strategically located, India is not just a competitive player today, it is shaping up to be the foundation of the region’s digital future.
