AI surge in India requires additional 45-50 million sq ft real estate: Report

New Delhi, May 8 As demand for artificial intelligence (AI) infrastructure grows, the country could require an additional 45–50 million square feet of real estate space and 40-45 terawatt hours (TWH) incremental power by 2030 to meet the growing demand for AI, a report showed on Thursday.

India offers cost advantages, a renewable energy focus and a strategic location for the development of data centres, said a Deloitte report.

The report further suggests that targeted policy interventions will be critical in positioning India as a global AI hub.

The report identifies six key pillars for India to reach its full potential in building a world-leading and AI-ready ecosystem.

These pillars are real estate, power and utilities infrastructure, connectivity and network infrastructure, compute infrastructure, talent and policy framework.

"For India to accelerate its AI capabilities and realise its potential, it is necessary to introduce enabling policies to support the sector. India must develop its AI-ready infrastructure to meet this rising demand for data analytics and processing,” said S Anjani Kumar, Partner, Deloitte India.

“Moreover, strengthening research and development (R&D), improving talent pipelines, securing vernacular datasets and supportive policies will further accelerate the AI-driven growth.

India's strategic location allows it to serve domestic and global markets effectively, positioning it as a critical node in the global data centre ecosystem.

However, India’s vision to become a global AI hub demands a relook at the traditional data centre infrastructure. A greater focus on building high-performance compute infrastructure, scalable power and cooling systems and efficient networking infrastructure, with a reconsideration of policy framework, can make India a hotspot for AI-powered data centre development in the coming years,” added Neha Aggarwal, Partner, Deloitte India.

While India offers an advantage in data centre real estate with lower land and labour costs, significant new constructions are needed to meet the additional AI data centre capacity.

The report highlights how rising interest in colocation models and government initiatives offering incentives under various state government data centre policies are helping drive growth.

From a policy perspective, the report suggests that introducing a separate category for data centres in the National Building Code and recognising them under the Essential Services Maintenance Act could further incentivise specialised infrastructure development.

Additionally, fast-tracking and simplifying the approvals by setting up data centre facilitation units can help boost the deployment of data centres, it added.

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