REPORT ATTRIBUTE |
DETAILS |
Historical Period |
2019-2022 |
Base Year |
2023 |
Forecast Period |
2024-2032 |
India Data Center Cooling Market Size 2024 |
USD 346.67 Million |
India Data Center Cooling Market, CAGR |
16.20% |
India Data Center Cooling Market Size 2032 |
USD 1,674.45 Million |
Market Overview
The India Data Center Cooling Market is projected to grow from USD 346.67 million in 2023 to an estimated USD 1,674.45 million by 2032, with a compound annual growth rate (CAGR) of 16.20% from 2024 to 2032. This growth is driven by the rapid expansion of data centers across the country due to the increasing demand for cloud computing, big data, and internet services.
The primary drivers of this market include the rising need for energy-efficient cooling solutions and the push for sustainable data center operations. With growing environmental concerns, companies are shifting towards innovative cooling technologies, such as liquid cooling and free cooling systems, which consume less energy while maintaining optimal data center performance. Additionally, the increasing usage of artificial intelligence (AI) and the Internet of Things (IoT) is propelling data center growth, thereby boosting demand for efficient cooling systems.
Geographically, major demand is concentrated in urban regions such as Mumbai, Bengaluru, and Hyderabad, where data center developments are expanding rapidly. Key players in the India data center cooling market include Schneider Electric, Vertiv Group Corp, STULZ GmbH, Rittal GmbH & Co. KG, and Delta Electronics, Inc., all of whom are investing heavily in cutting-edge cooling technologies to maintain a competitive edge in this growing sector.
Access crucial information at unmatched prices!
Request your free sample report today & start making informed decisions powered by Credence Research!
Download Free Sample
Market Drivers
Rapid Growth of Data Centers Across India
The exponential growth of data centers across India is a primary driver of the Data Center Cooling Market. Major cloud service providers are investing heavily in the Indian market, establishing massive data centers in key cities. For instance, the number of data centers in India has grown significantly in recent years, with several new facilities being announced or under construction. This expansion has created a pressing need for advanced cooling solutions to maintain optimal operating temperatures within these facilities. Traditional cooling systems are being supplemented with advanced technologies like liquid cooling and immersion cooling to improve energy efficiency and reduce environmental impact. The Ministry of Electronics and Information Technology has reported a substantial increase in data center capacity across the country, highlighting the rapid expansion of this sector. This growth trend is expected to continue, driven by increasing digitalization and the government’s push for data localization, further fueling demand for efficient cooling systems in the coming years.
Rising Demand for Energy-Efficient Cooling Solutions
The growing emphasis on energy efficiency and sustainability is another significant driver of the data center cooling market in India. Cooling systems account for a substantial portion of data center power consumption, prompting operators to adopt more energy-efficient technologies. The Bureau of Energy Efficiency has implemented standards and guidelines for data center energy efficiency, encouraging the adoption of advanced cooling solutions. Industry reports indicate a shift towards liquid cooling, free cooling, and hybrid systems that utilize natural resources to lower cooling costs. For example, a survey conducted by a leading IT industry association revealed that a majority of data center operators in India are planning to invest in energy-efficient cooling technologies within the next few years. Government initiatives promoting green data centers have also contributed to this trend, with several states offering incentives for the adoption of energy-efficient cooling solutions. This focus on sustainability and cost reduction through efficient cooling is expected to remain a key market driver in the foreseeable future.
Increased Adoption of Cloud Computing, AI, and IoT Technologies
The rising adoption of cloud computing, artificial intelligence (AI), and the Internet of Things (IoT) is driving significant growth in the data center cooling market. According to a report by the National Association of Software and Service Companies (NASSCOM), cloud adoption in India has seen rapid growth, with businesses across sectors transitioning to cloud-based solutions. This shift has led to increased demand for data center infrastructure and, consequently, advanced cooling systems. Government data indicates a surge in AI and IoT applications across various sectors, including healthcare, manufacturing, and retail. This proliferation is driving the expansion of edge data centers in urban and semi-urban areas, which require efficient cooling solutions to handle fluctuating workloads. For instance, a significant percentage of Indian enterprises are planning to increase their investments in AI and IoT technologies, further fueling the demand for data center infrastructure and cooling solutions. As these technologies continue to evolve and gain wider adoption, the need for reliable and scalable cooling systems is expected to grow proportionally.
Government Initiatives and Investments in Digital Infrastructure
The Indian government’s push toward creating a robust digital infrastructure is also playing a crucial role in driving the data center cooling market. Initiatives such as the “Digital India” program aim to enhance the country’s digital ecosystem by improving broadband connectivity, expanding data storage capacities, and encouraging investments in IT infrastructure. These initiatives have led to increased demand for data centers, particularly in Tier 2 and Tier 3 cities, where data center infrastructure is still underdeveloped. Additionally, the government has introduced favorable policies and incentives for data center development, including special economic zones (SEZs) for data centers, tax breaks, and easier land acquisition processes for setting up large-scale data centers. These policies are attracting foreign direct investments (FDIs) from global tech giants, leading to a boom in data center construction across India. The government’s focus on sustainable development and energy-efficient technologies has also incentivized data center operators to adopt innovative cooling solutions that reduce power consumption and align with the nation’s climate goals. Moreover, the advent of 5G technology in India is expected to further drive demand for data centers, as 5G networks require low-latency data processing and real-time analytics. This will lead to an increased need for edge data centers, which will further boost demand for advanced cooling technologies in the coming years. The government’s proactive stance on digital infrastructure development, coupled with the implementation of policies that encourage energy efficiency, is set to accelerate the growth of the data center cooling market over the forecast period.
Market Trends
Shift Toward Sustainable and Energy-Efficient Cooling Solutions
The India data center cooling market is witnessing a significant shift towards sustainable and energy-efficient cooling technologies. Data center operators are increasingly prioritizing eco-friendly cooling systems to reduce power consumption and minimize environmental impact. Advanced technologies like liquid cooling, free cooling, and evaporative cooling are gaining traction, offering improved efficiency over traditional air-based methods. For instance, NTT announced the deployment of Direct Contact Liquid Cooling and Liquid Immersion Cooling in its data centers in India, aiming to reduce energy consumption compared to traditional cooling systems. The adoption of renewable energy sources for cooling systems is also on the rise, with operators integrating solar and wind power to fuel their cooling infrastructure. This trend aligns with India’s growing focus on sustainability, as evidenced by the government’s push for green data centers. The Bureau of Energy Efficiency (BEE) has introduced guidelines for energy-efficient data centers, encouraging the adoption of innovative cooling technologies.
Growth in Edge Data Centers and Micro Data Centers
The India data center cooling market is experiencing rapid growth in edge data centers and micro data centers, driven by the increasing adoption of IoT, AI, and 5G technologies. These smaller, localized data centers require efficient and scalable cooling solutions to handle fluctuating workloads in compact environments. For instance, Schneider Electric has introduced micro data center solutions in India, featuring integrated cooling systems designed for edge computing applications. The trend towards edge and micro data centers is particularly evident in urban and semi-urban areas, where low-latency data processing is crucial. The Indian government’s Digital India initiative has further accelerated this trend, promoting the establishment of data centers across the country. As a result, there’s a growing demand for compact, modular cooling solutions that can be easily deployed and scaled. The increasing investments in edge data centers across major cities, indicating a strong market for specialized cooling solutions tailored to these smaller facilities.
Market Restraints and Challenges
High Initial Costs and Energy Consumption
One of the major obstacles for the India data center cooling market is the substantial upfront investment required for advanced cooling technologies. While solutions like liquid cooling and immersion cooling offer improved efficiency, they come with hefty initial costs that can be prohibitive, especially for smaller operators. For instance, the average cost of implementing a liquid cooling system in India is significantly higher compared to traditional air cooling methods. This financial barrier is particularly acute in Tier 2 and 3 cities, where cost-sensitive businesses may be reluctant to make large cooling infrastructure investments. Beyond the initial outlay, ongoing operational expenses for specialized maintenance and repairs add further financial pressure. The cooling-related costs account for a substantial portion of a data center’s total operational expenditure. While these advanced systems promise long-term energy savings, the short-term financial burden can deter adoption, especially for companies focused on immediate cost optimization.
Power Infrastructure and Energy Supply Challenges
India’s data center cooling market is also constrained by inadequate power infrastructure and unreliable energy supply in many regions. For example, a government energy audit revealed that several emerging data center hubs experience frequent power fluctuations and outages. This inconsistency poses significant risks to cooling system operations, potentially leading to equipment damage and data loss. To mitigate these risks, many data centers rely heavily on diesel generators and other backup power sources. However, this approach increases operational costs and conflicts with sustainability goals. For instance, the backup power generation contributes substantially to the carbon footprint of data centers in the country. Furthermore, the high energy demand from cooling systems can overburden local power grids, especially during peak usage periods. This strain on infrastructure creates additional challenges for data center operators, particularly in rapidly developing urban areas where power supply may not yet meet the needs of large-scale data facilities.
Market Segmentation Analysis
By Component
The India data center cooling market is segmented into Solutions and Services. The Solutions segment includes cooling equipment such as air conditioners, precision air conditioners, chillers, and air handling units (AHUs). This segment dominates the market due to the increasing demand for efficient cooling technologies in hyperscale and enterprise data centers. For instance, over half of data center operators plan to upgrade their cooling infrastructure in the next two years to improve energy efficiency. The Services segment encompasses installation, deployment, support, consulting, and maintenance services. The growing complexity of data center infrastructure is driving demand for expert services to ensure optimal cooling system performance. As an example, a major IT services provider reported a substantial increase in requests for cooling system audits and optimization services from enterprise clients looking to reduce their data center energy costs.
By Application
Data center cooling applications are primarily categorized into Telecom & IT, Retail & BFSI, Healthcare, Energy, and Others. The Telecom & IT sector accounts for the largest share due to the rapid expansion of IT infrastructure and the growing adoption of cloud computing. For instance, a government report on India’s digital economy highlighted that the country’s data consumption has grown exponentially, driving the need for more data centers and efficient cooling solutions. The Retail & BFSI segment is also witnessing significant growth, driven by the digital transformation of banking, financial services, and e-commerce operations. As an example, a leading Indian bank recently announced plans to build multiple new data centers to support its digital banking initiatives, with a focus on implementing advanced cooling technologies. The Healthcare and Energy sectors are increasingly adopting advanced cooling solutions to support their data-intensive operations. A healthcare organizations in India are rapidly expanding their data center capacities to support telemedicine and electronic health record systems, creating new opportunities for cooling solution providers.
Segments
Based on Component
Based on Application
- Telecom & IT
- Retail & BFSI
- Healthcare
- Energy
- Others
Based on Solution
- Air Conditioners
- Precision Air Conditioners
- Chillers
- Air Handling Units
- Others
Based on Containment
- Raised Floor with Containment
- Hot Aisle Containment (HAC)
- Cold Aisle Containment (CAC)
- Raised Floor without Containment
Based on Services
- Installation & Deployment
- Support & Consulting
- Maintenance Services
Based on Cooling Type
- Raised Floor
- Non-Raised Floors
Based on Structure
- Rack-based Cooling
- Row-based Cooling
- Room-based Cooling
Based on Region
- North India
- South India
- East India
- West India
Regional Analysis
South India (40%):
South India dominates the India data center cooling market, accounting for approximately 40% of the total market share. This region, particularly cities like Bengaluru, Hyderabad, and Chennai, is home to numerous IT and telecom companies, as well as hyperscale data centers operated by global tech giants. For instance, according to a report by the India Brand Equity Foundation (IBEF), Bengaluru alone hosts over 400 R&D centers of global tech companies. The availability of reliable power infrastructure and strong connectivity networks makes South India an ideal location for data center operations. Additionally, the region benefits from favorable government policies and incentives aimed at promoting data center development, further boosting the demand for advanced cooling solutions. As new data centers are continuously being established, the market for energy-efficient and sustainable cooling technologies is expected to see robust growth in South India.
West India (30%):
West India holds the second-largest share in the India data center cooling market, with a market share of around 30%. Mumbai and Pune are the key cities driving this growth, as they are major financial hubs with a high concentration of data centers serving the BFSI (Banking, Financial Services, and Insurance) sector. For instance, according to a report by the Maharashtra Industrial Development Corporation (MIDC), Mumbai accounts for over 60% of India’s data center capacity. The growing adoption of cloud services and the increasing number of enterprises digitizing their operations in these cities have led to a rising demand for efficient cooling systems. Additionally, the region’s proximity to undersea cable landing stations further enhances its appeal for data center operations, supporting the demand for advanced cooling technologies.
Key players
- Hitachi Energy Ltd.
- STULZ GmbH
- Schneider Electric SE
- Rittal GmbH & Co. KG
- ALFA LAVAL Corporate AB
- Kirloskar Chillers Private Limited
- Johnson Controls Inc.
- Mitsubishi Electric Corporation
- Munters Group
- Eaton Corporation PLC
- Prasa Infocom & Power Solutions Pvt. Ltd.
Competitive Analysis
The India data center cooling market is highly competitive, with both global and domestic players vying for market share. Leading companies such as Hitachi Energy, Schneider Electric, and Johnson Controls offer a range of advanced cooling solutions designed to enhance energy efficiency and sustainability in data centers. These companies focus on innovation, offering precision cooling and liquid cooling technologies that cater to the growing demand for energy-efficient solutions. Domestic players like Kirloskar Chillers and Prasa Infocom & Power Solutions leverage local market expertise and competitive pricing to strengthen their position. Mitsubishi Electric and ALFA LAVAL also contribute to the competitive landscape by providing reliable cooling systems and services. The market’s competition is driven by technological advancements, service quality, and the ability to meet evolving customer requirements for scalable, efficient cooling systems.
Recent Developments
- In March 2024, STULZ announced the launch of CyberCool CMU, an innovative coolant management and distribution unit (CDU) designed to maximize heat exchange efficiency in liquid cooling solutions. This product is set to be launched at Data Centre World Frankfurt 2024 and offers industry-leading levels of energy efficiency, flexibility, and reliability within a small footprint.
- In September 2024, Munters acquired Geoclima, an Italian manufacturer of air- and water-cooled chillers used in data centers worldwide. This acquisition allows Munters to expand its data center cooling solutions portfolio and strengthen its global offering.
- In September 2024, Eaton launched its new modular data center solution called SmartRack. This offering combines racks, cooling, and service enclosures to withstand up to 150kW of equipment load, designed for organizations looking to meet the growing demand for edge computing, machine learning, and AI.
- In September 2024, Alfa Laval announced its participation in Chillventa 2024, where it will introduce energy-efficient plate heat exchangers for industrial, commercial, and residential heat pumps. The company is also unveiling a new SE range of brazed heat exchangers specifically designed for use with flammable natural refrigerants in heat pumps and air conditioning systems.
Market Concentration and Characteristics
The India Data Center Cooling Market exhibits a moderately fragmented structure, with a mix of global and domestic players contributing to market dynamics. Leading international companies such as Schneider Electric, Johnson Controls, and Mitsubishi Electric hold significant market shares due to their advanced technological offerings and global expertise in energy-efficient cooling solutions. However, local players like Kirloskar Chillers and Prasa Infocom & Power Solutions are also gaining ground by catering to region-specific needs with cost-effective solutions and localized services. The market is characterized by strong competition, driven by increasing demand for sustainable and energy-efficient cooling technologies as data centers expand across the country. Technological innovation, service quality, and after-sales support are key differentiators in this evolving market.
Shape Your Report to Specific Countries or Regions & Enjoy 30% Off!
Report Coverage
The research report offers an in-depth analysis based on Component, Application, Solution, Containment, Services, Cooling Type, Structure and Region. It details leading market players, providing an overview of their business, product offerings, investments, revenue streams, and key applications. Additionally, the report includes insights into the competitive environment, SWOT analysis, current market trends, as well as the primary drivers and constraints. Furthermore, it discusses various factors that have driven market expansion in recent years. The report also explores market dynamics, regulatory scenarios, and technological advancements that are shaping the industry. It assesses the impact of external factors and global economic changes on market growth. Lastly, it provides strategic recommendations for new entrants and established companies to navigate the complexities of the market.
Future Outlook
- The India data center cooling market will continue to grow as the demand for data storage and processing rises, driven by cloud adoption, e-commerce, and digital transformation across industries.
- With growing environmental concerns and energy costs, data center operators will increasingly adopt energy-efficient cooling technologies like liquid cooling and free cooling systems to reduce operational expenses.
- The proliferation of IoT, AI, and 5G technologies will lead to the expansion of edge data centers, further boosting demand for compact, efficient cooling solutions tailored to smaller facilities.
- Technologies such as immersion cooling and precision air conditioning will gain popularity as they provide better energy efficiency and maintain optimal performance in high-density data centers.
- The Indian government’s focus on improving digital infrastructure, coupled with favorable policies for data center development, will drive investments in advanced cooling solutions.
- The push for sustainability will continue to shape the market, with data centers adopting green cooling solutions such as renewable energy-powered cooling systems to reduce carbon footprints.
- Both domestic and international companies will ramp up investments in the data center cooling sector, fostering innovation and helping to scale cooling solutions for hyperscale data centers.
- The growth of data centers in Tier 2 and Tier 3 cities will increase the demand for efficient cooling solutions, as these regions develop into emerging digital hubs.
- The integration of artificial intelligence (AI) in cooling systems will enable better temperature management and predictive maintenance, enhancing system efficiency and reducing energy consumption.
- The market will witness intensifying competition, as global leaders and local companies innovate and offer differentiated cooling solutions to meet the increasing demand for scalable, reliable, and cost-effective systems.