Power solutions company Cummins India has stated that it is experiencing a "promising opportunity" in the data center sector, which is undergoing substantial growth due to AI adoption and data localisation.

Cummins India Ltd, a subsidiary of US-based Cummins Inc, operates in power generation, aftermarket services, and exports, featuring five manufacturing plants along with assembly and distribution centers.

"Data centres have been included in our portfolio for some time. We observe growth in data centers emerging in India, which indicates we have a crucial role to fulfill,"  says Shveta Arya, Managing Director of Cummins India Ltd.

These centers need 99.99 percent uptime for clients, and they offer various levels of backup power, she stated.

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According to the report, India possesses 1.4 gigawatt (GW) of active data centre capacity with approximately 1.4 GW in development and an additional roughly 5 GW in the planning phase.

This would be supported by data localization regulations, promoting a favorable regulatory environment and government subsidies, along with increasing cloud adoption, among other favorable factors, it mentioned.

"Arya mentioned that examining the India market reveals a strong opportunity since India has not expanded data centres as rapidly as the US or Europe."

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She stated, however, that Cummins India does not view the segment as the primary growth factor for its business in the future.

"We possess a highly varied portfolio... data centers will serve as a solid growth catalyst (yet) they might not be the primary growth catalyst..." "We must examine the expected growth of data centres in the coming years to determine if it will be the primary growth driver, correct?" Arya stated.

 

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Currently, the manufacturing, e-commerce, and both residential and commercial sectors are expanding at remarkable speeds in India, she stated, noting that the government's introduction of GST reforms 2.0 and PLI schemes, along with the influx of private capital expenditure, will also drive growth in other industrial markets, she mentioned.

"It’s relative that if all sectors are expanding, it's hard to claim that data centers will solely be the primary source of growth." "They will certainly present a great chance for us, but we still need to determine how much faster that pace can be compared to other segments," Arya remarked.