Key Takeaways:
- India’s edge data capacity set to rise from 70 MW to over 200 MW by 2027.
- Growth driven by AI, cloud adoption and low-latency service demands.
- Edge centres face higher rentals, security risks, and tech challenges.
India Prepares for Sharp Rise in Edge Data Capacity
India’s edge data centre capacity is expected to grow nearly threefold by 2027, according to rating agency ICRA. Current capacity stands at around 60–70 megawatts (MW) and is projected to reach 200–210 MW in three years.
This growth is fuelled by the adoption of emerging technologies such as generative AI, real-time analytics, and cloud computing. Edge data centres offer decentralised, low-latency solutions for these applications, making them increasingly vital in the digital infrastructure ecosystem.
What Are Edge Data Centres?
Unlike traditional data centres, which are typically large and centralised, edge data centres are smaller facilities located closer to end-users. Their main advantage lies in real-time data processing with reduced latency. This makes them useful for sectors that rely on fast response times, such as healthcare, financial services, and industrial automation.
Globally, edge data centres account for around 10 per cent of total capacity, which stood at 50 gigawatts (GW) as of December 2024. The US holds 44 per cent of global edge capacity, followed by EMEA at 32 per cent and APAC at 24 per cent. India currently contributes just 5 per cent of its overall data capacity to edge infrastructure, or as little as 1 per cent when excluding captive-use facilities.
Hub-and-Spoke Model to Shape India’s Digital Future
According to ICRA, India’s future digital infrastructure will operate on a “hub-and-spoke” model. Traditional data centres will remain the core for mass-scale computing and storage, while edge centres will support real-time local processing.
“Edge and traditional data centres will work together to support applications in healthcare, defence, banking, and agriculture,” said Anupama Reddy, Vice President at ICRA.
Challenges Remain Despite Strong Outlook
While the growth outlook is strong, several challenges could slow progress. These include:
- Security risks due to remote deployments in smaller cities
- A shortage of skilled professionals in Tier II and Tier III locations
- Fast-paced technology upgrades that risk making existing infrastructure obsolete
- Integration issues between edge and traditional data centres
Further, edge centres are expected to incur higher capital expenditure per MW than traditional data centres. However, this is likely to be offset by higher rental yields, particularly as they cater more to retail customers than to large enterprises or cloud providers.
RailTel, telecom operators, and established data centre players are expected to lead the next phase of India’s edge data centre expansion.
