Not saturated yet: Why India’s data center market is just getting started

Amit Agrawal, President of Techno Digital, speaks with Aanchal Ghatak about the company’s ambitious plan to build 250 MW of data centre capacity across India, the role of AI and automation in next-generation infrastructure, and how power efficiency and partnerships are shaping the industry’s future.

You’ve been part of the digital and data centre ecosystem for over two decades. How have you seen India’s digital infrastructure evolve during this time?

I’ve been in this space for nearly 25 years, starting with companies like Cisco and Dell—organisations that were instrumental in India’s early digital transformation. Over these two and a half decades, I’ve witnessed several waves of change: from the first phase of digitalisation and the rise of cloud adoption to today’s era of AI and IoT. It’s been rewarding to see India’s digital infrastructure mature and become a critical foundation for the country’s economic growth.

Techno Digital recently announced a $1 billion investment to develop 250 MW of data centre capacity. How will this expansion be structured, and which regions are the initial focus?

Before getting into specifics, it’s important to understand our parent company—Techno Electric & Engineering Company Limited (TECL)—which has over four decades of experience in India’s power infrastructure sector. More than 60% of Power Grid Corporation’s substations have been developed or supported by Techno Electric.

We believe power and digital infrastructure go hand in hand, and that principle guides our data centre strategy. Our first 36 MW facility has gone live in Chennai, and construction is underway for a 15 MW facility in Kolkata. We’ve also partnered with RailTel to build a large data centre in Noida, along with around 102 edge data centres nationwide.

These edge facilities, ranging from 500 kW to 3 MW, will be distributed across Tier-2 and Tier-3 cities such as Gandhinagar, Indore, Bhopal, Bhubaneswar, and Cochin. In total, we aim to develop six to seven large data centres in the immediate phase, scaling up to 20–25 in the next few years, and complete all 102 locations within four years.

With AI and robotics transforming operations, how is the skill landscape in data centre management changing?

Data centres are highly repetitive yet mission-critical environments. Many operational checks—power utilisation, temperature control, efficiency monitoring—occur every 20 to 25 minutes. We’ve integrated AI-driven systems to automate much of this monitoring and analytics.

This shift enhances reliability and reduces manual intervention, but it also changes workforce requirements. Professionals now need to manage intelligent systems, interpret insights, and ensure that AI-led operations remain ethical and secure. The emphasis is moving from routine monitoring to intelligent management.

Given your distributed edge model, how are you managing operations and security across 100+ sites?

We use AI-enabled security and surveillance systems that integrate CCTV feeds with access controls to automate perimeter checks and restrict unauthorised entry. Managing 100+ edge locations manually would be impractical, so we’re relying on remote monitoring and robotic automation to maintain consistency across sites.

Each new deployment brings its own challenges—geographical, climatic, or infrastructural—and we continuously refine our systems based on these learnings. Over time, we’re embedding intelligence not just in our operations but in the infrastructure itself.

What industries or sectors are driving demand for your edge data centres?

Edge data centres are particularly valuable for content delivery networks, OTT platforms, gaming, and education, where users are geographically distributed. Healthcare is another focus area—especially for local AI-based diagnostics where patient data must stay within region-specific boundaries.

We’re also working with government agencies and educational institutions at the panchayat and district levels, where local governance data is being generated.

Broadly, edge data centres serve three use cases:

1. Distributing centralised data across geographies for faster access.

2. Aggregating locally generated data for AI training and analytics.

3. Supporting AI inferencing—for example, enabling real-time decision-making for autonomous systems.

That’s why we see Tier-2 and Tier-3 cities emerging as vital nodes in India’s digital ecosystem over the next few years.

Some believe India’s data centre market is getting saturated. What’s your view, and how does Techno Digital differentiate itself?

The market is far from saturation. The U.S. currently operates around 40 GW of data centre capacity, while India has only 1.2–1.3 GW. Yet, Indian users consume nearly three times more data than the average American user.

Our differentiation comes from four key strengths—land, network, power, and capital. Our partnership with RailTel connects us to over 500–600 locations across India, giving us a robust network backbone. Our 40 years in the power sector give us an edge in sourcing and managing electricity efficiently.

Importantly, we’ve maintained debt-free growth so far—our major facilities in Chennai, Gurgaon, Mumbai, Kolkata, and Noida have been funded through internal accruals. For the next phase, we will use strategic debt to optimise capital.

We also design for the future. Our Chennai facility, for instance, was built for racks consuming up to 30 kW—anticipating the rise of AI and GPU workloads. Finally, we rely on partnerships with cloud and AI service providers instead of trying to do everything ourselves.

How are you addressing rising power density and cooling requirements with AI and GPU workloads?

Higher rack density impacts both power distribution and cooling. We’ve shifted from underfloor cabling to busway distribution systems, allowing dynamic allocation from 16A single-phase to 63A three-phase power—up to 45 kW per rack without downtime.

For cooling, we’ve adopted liquid-based chillers instead of air-based systems. Our infrastructure supports upgrades to rear-door, direct-to-chip, or immersion cooling with minimal modifications—making us future-ready for high-performance computing environments.

Power reliability and cost are major concerns. How does your background in the power sector help?

It gives us a strong foundation in planning and location selection. For example, our Chennai data centre has dual 110 kV substations on campus for stability. In Tier-2 cities, we use our power-sector expertise to identify optimal locations.

We’re also deploying a hybrid energy model that blends renewable, battery, and grid power to manage both costs and sustainability. Within facilities, we distribute power at 11 kV to minimise internal losses, maintaining efficiency and competitive energy costs.

Do you plan to align your edge infrastructure with India’s Digital Public Infrastructure (DPI) initiatives like Aadhaar, ONDC, or UPI?

Yes, that’s the broader goal. Data centres form the foundation of Digital Public Infrastructure. We want to extend high-quality digital infrastructure to Tier-2 and Tier-3 cities such as Agra, Varanasi, Cochin, and Tripura. This not only supports national DPI frameworks but also encourages local talent development and economic growth.

Finally, how do you see India’s data centre industry evolving in the next decade?

There’s a saying in our industry—“Where power goes, data flows.” The sector’s future will be defined by how efficiently we manage power and digital growth together.

As India continues its digital expansion, the data centre industry will experience another golden decade—five to six years of rapid growth followed by a period of consolidation and maturity.