Cummins India Bets on Data Centre Boom to Drive Future Growth

Cummins India, a power solutions provider, has stated that it sees a "good opportunity" in the data centre industry, which is experiencing a notable rise due to the adoption of AI and data localisation. With five production sites, assembly facilities, and distribution centres, Cummins India Ltd, a division of the US-based Cummins Inc., is engaged in the power-generating, aftermarket, and export industries.

Data centres have long been a part of Cummins India's portfolio, according to Shveta Arya, Managing Director, Cummins India Ltd., who spoke with PTI. Cummins India plays a significant part in the brand's expansion of data centres in India. She went on to say that these facilities have varying degrees of backup power and want 99.99% customer uptime.

India has Perfect Infra for Data Centres-Arya

For their operations to run at a 99.99% uptime, India's data centres employ gensets for backup power after receiving their own prime power electricity from the grid or a substation. "So, we definitely see a play and an opportunity for us as the data centres grow in the India market," Arya stated. It should be mentioned that data centres accounted for up to 40% of Cummins India's total power generation revenue in the September quarter. The remainder was spread over various sections.

Recent research by Macquarie Equity Research estimates that India's data centre capacity would quadruple based on capacity currently under construction and might rise fivefold by 2030 if pipeline capacity is expedited. India currently has 1.4 gigawatts (GW) of operating data centre capacity, according to the research.

An additional 1.4 GW is being built, and another 5 GW is in the planning stages. It said that among other tailwinds, this will be supported by data localisation rules, an accommodating regulatory environment, government subsidies, and growing cloud adoption. According to Arya, the Indian market presents a great potential because the country has not been expanding its data centres at the same rate as the US or Europe.

Why Indian Market is Sky Rocketing

According to Arya, India's manufacturing, e-commerce, residential, and commercial real estate sectors are currently expanding at previously unheard-of rates. She added that other industrial markets will expand as a result of the government's implementation of GST reforms 2.0, PLI schemes, and the amount of private capital coming in. Arya went on to remark that it's hard to predict that data centres will be the primary driver of growth if other segments are expanding. Cummins India will undoubtedly have a great chance, but the company must determine how much faster that pace can be compared to other segments.