By Mr. Shibu Paul, Vice President – International Sales at Array Networks
Data centers are the silent backbone of India’s digital growth, powering everything from mobile banking to government e-services and rapidly expanding sectors like artificial intelligence. As digital adoption surges in India, companies are adding more data centers across metropolitan cities like Mumbai, Hyderabad, and Bengaluru. But with growth come new security challenges and risks that Indian businesses cannot afford to ignore.
The Growth Trajectory and its Risks
India’s data center capacity is expected to nearly double from 950 MW in 2024 to 1,800 MW by 2026, driven by rising demand for cloud services and AI workloads. The value of India’s data center market is projected to reach $10 billion by 2027. Despite this progress, the outages remain alarmingly high. Studies reveal Indian businesses lose around $2 million for every hour of downtime, exceeding the global average.
The Rise of Dual Attacks
Unlike in the past, when cyberattacks mainly targeted networks, today’s hackers combine online attacks with physical sabotage in what is known as the “dual-attack model.” For example, while a cybercriminal tries to breach a network firewall, another may attempt to disable equipment physically inside the data center building. This coordinated attack can cause far-reaching damage.
Multi-Layered Defense System
To mitigate these sophisticated threats, Indian data center operators have adopted multiple layers of defense. They have introduced biometric systems such as fingerprint and facial recognition to control access. Advanced sensors and surveillance cameras powered by artificial intelligence can spot unusual activity and alert security teams immediately. This smart layered approach ensures that if one security layer fails, others can compensate to prevent breaches.
Securing the Supply Chain
India’s data centers are also focusing heavily on securing their supply chains. With global tensions around hardware manufacturing, all components entering a facility right from servers to tiny circuit boards, need to be confirmed as genuine and tamper-free. AI-powered scanning tools are increasingly used to check thousands of parts quickly, reducing hidden risks.
Businesses are fast realising that protecting only the digital perimeter is insufficient. Every piece of equipment must be verified to prevent becoming a vulnerability.
Alongside security, power management is a top priority. Indian data centers face rising energy demands. Reports show rack power consumption is climbing steadily, especially for AI workloads. Mumbai and Hyderabad, leading India’s AI data center growth, are investing in advanced cooling technologies and reliable backup energy systems to ensure smooth operations and prevent downtime. Failures in cooling or power systems can cause major outages that result in millions in losses. To reduce this risk, Indian operators focus on smart infrastructure and automated monitoring to maintain stability and avoid disruptions.
Navigating Encrypted Threats
Cybersecurity experts also warn that more attacks today are concealed within encrypted network traffic, bypassing traditional firewalls. To counter this, Indian data centers are adopting tools that decrypt, inspect, and then re-encrypt data communications in real time. This process allows security teams to detect threats without compromising privacy.
Capacity vs. Demand: A Looming Gap
Despite strong growth, India faces a shortage of AI-ready data center capacity. By 2030, demand could outpace supply by about 15 gigawatts, according to international analysts. To stay ahead, many Indian businesses are adopting to modular and software-controlled data center designs that allow faster scaling and more agile operations.
Policy and Regulatory Drivers
India’s Digital Personal Data Protection Act (DPDPA) mandates sensitive data to be stored locally, prompting investments from global companies like Amazon, Microsoft, and Google, which have expanded capacities in India to meet these requirements.
In alignment with these priorities, the Indian government’s 2025 budget allocated over 1,900 crore towards cybersecurity and digital infrastructure initiatives reinforcing government’s commitment to further strengthen the security and efficiency of India’s expanding data center ecosystem.
Innovation by Indian Leaders
Local data center leaders such as CtrlS and Sify Technologies are at the forefront of integrating AI-powered threat detection, biometric controls, and efficient energy management systems. Their innovations are not only raising the bar for security but also contributing to a resilient and self-reliant digital ecosystem.
For Indian businesses relying on data centers, the message is clear: data center security must be a priority. It requires a complete strategy that includes smart physical security, AI-driven monitoring, supply chain verification, encrypted traffic inspection, and robust power management.
Outages and breaches are no longer just technical problems. They pose serious business risks that can cause millions of rupees in losses and damage customer trust.
The Path Forward
Indian companies must act decisively to implement next-generation security measures. Those that do will benefit from uninterrupted operations, stronger compliance, and gain a competitive edge in an increasingly digital economy.
Security is no longer just a technical upgrade. It is a holistic approach combining AI-based monitoring, encrypted data inspections, supply chain checks, and managing power and cooling needs as a unified system. Experienced providers like Array Networks have shown that integrated solutions can simplify security without adding extra costs. For businesses, the key question is no longer “if” they should invest in modern security but “how soon” they can implement it effectively that safeguard their operations and reputations.