India's Edge Data Centre Capacity to Reach 210 MW by 2027

• India’s edge data centre capacity to rise from 70 MW in 2024 to 210 MW by 2027.
• Edge centres enable real-time, low-latency processing near end users.
• Growth faces hurdles like security risks, high costs, and skill gaps.

According to the rating agency ICRA, India's edge data centre capacity is projected to grow substantially to 200-210 Megawatt (MW) by 2027, rising from 60-70 MW in 2024, representing a threefold increase fueled by the rise of new technologies.

Edge data centres are compact, decentralised facilities situated nearer to end-users and their devices. In contrast to conventional data centres that are usually expansive and centralized, edge data centres facilitate immediate data processing with low latency.

As of December 2024, global data centre capacity (including that of cloud operators) is projected to be approximately 50 Gigawatts (GW), with roughly 10 percent allocated to edge data centres.

The United States holds more than 44 percent of global edge data center capacity, with Europe, the Middle East, and Africa (EMEA) at 32 percent and the Asia Pacific (APAC) region at 24 percent.

India is a comparatively recent participant in the edge data center sector. The present edge data centre capacity represents approximately 5 percent of India's overall data centre capacity.

Additionally, if we disregard the edge data centre capacity utilized for internal purposes by a major data centre operator, the existing edge data centre capacity represents only about 1 percent of the total capacity.

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Giving more insights, Anupama Reddy, Vice President and Co-Group Head, Corporate Ratings, ICRA, said, "Edge data centres differ from traditional data centres in multiple parameters like size, location, scale, time taken to construct, capex cost per MW, distance from end user, etc."

"In the Indian context, traditional data centres and edge data centres are complementary pillars of digital infrastructure. With the expanding cloud ecosystem of India, traditional data centres will keep fuelling mass-scale computing, artificial intelligence (AI), and cloud workloads, and edge data centres will facilitate real-time processing and localised services."

Reddy stated that conventional and edge data centres are anticipated to function in the hub-and-spoke model to improve efficiencies in sectors like healthcare, banking, agriculture, Defence, and manufacturing, among others.

Despite the optimistic prospects, several significant challenges for edge data centers consist of security risks from remote setups (primarily in tier II and tier III cities), swift technological advancements that may lead to obsolescence, a lack of skilled workers in rural regions, and compatibility problems with conventional data centers.

"The rentals for edge data centres are anticipated to be on the higher side compared to traditional data centres, as they will be catering primarily to retail customers against enterprise/hyperscale customers for traditional data centres. Moreover, the relatively higher capex cost per MW for edge data centre compared to a traditional data centre is expected to be compensated by higher rentals. Established DC players and entities like RailTel, Telcom operators are likely to lead the edge data centre expansion in India," Reddy added.