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India's Tech Loans Surge: Data Centers Drive Growth
4 Aug
Summary
- Bank loans for India's tech infrastructure have doubled in two years.
- Loans to IT services and digital infrastructure grew 49% year-on-year.
- India is emerging as a leading global hub for data centers.
Bank loans disbursed to India's technology infrastructure sector have doubled over the past two years, underscoring the nation's growing prominence as a worldwide center for data centers and facilities supporting multinational corporations. Loans encompassing software development, IT services, and digital technology infrastructure experienced a substantial 49% year-on-year surge, reaching ₹53,859 crore by the end of June. This represents a near doubling from the ₹26,667 crore recorded two years prior.
The robust expansion in bank credit within this segment is primarily attributed to the accelerating growth of data centers, Global Capability Centres (GCCs), and IT-enabled services. These loans facilitate crucial investments in areas such as server and cloud infrastructure, corporate acquisitions, and cybersecurity enhancements. While software companies have historically maintained strong cash reserves, current credit demand is diversifying to include startups and data center operators within the expanding digital ecosystem.
Despite this significant growth, the ₹53,859 crore in loans at the end of June constitutes a modest 0.87% of the total services sector loan portfolio and an even smaller fraction of the overall non-food bank credit in India.
