India’s data centre industry is set for exponential growth, with installed capacity projected to rise from 1.1 gigawatts (GW) in 2024 to 3 GW by 2030, according to a comprehensive report by Avendus Capital titled “A Multi-Year Growth Proxy on India’s Data Explosion and Localisation Wave.” This rapid expansion reflects India’s ambitions to become a global digital powerhouse, as rising data consumption, adoption of artificial intelligence (AI), and government-driven data localisation policies reshape the country’s digital infrastructure landscape.

Investment Momentum in India’s Digital Backbone

The report highlights that annual investments in the Indian data centre sector, currently in the range of Rs. 8,582–12,870 crore (US$ 1–1.5 billion), are expected to double in the coming years. This surge is attributed to a confluence of factors:

• The massive increase in data generation from mobile apps, IoT, video streaming, and e-commerce

• Accelerated adoption of AI and cloud computing in both public and private sectors

• Regulatory pressure from data localisation laws mandating domestic storage of sensitive user data

• The government’s push for digital public infrastructure, smart cities, and fintech innovation

The report estimates that by 2033, India’s data consumption will necessitate at least 6 GW of data centre capacity, while current project pipelines are only expected to deliver 4.5 GW, leaving a supply gap of 1.5 GW—a major opportunity for investors and developers.

Hyperscale vs. Edge: India’s Dual Growth Model

India’s evolving digital architecture is being built on two core pillars:

1. Hyperscale Data Centres – Concentrated in core metropolitan hubs such as Mumbai, Chennai, Hyderabad, and Bengaluru, these are designed to serve large enterprises, cloud service providers, and content platforms.

2. Edge Data Centres – These are emerging across tier II and III cities, aimed at delivering low-latency support for real-time applications like autonomous vehicles, remote healthcare, smart utilities, and IoT ecosystems.

This two-pronged growth model ensures both centralised compute power and distributed access, enabling digital inclusion across the country.

Government Support Accelerating Infrastructure Expansion

The Indian government’s proactive stance has made the data centre sector highly investable. Key policy-level enablers include:

• Subsidised land banks allocated in designated IT zones and tech parks

• Electricity duty waivers and cross-subsidy relaxations for high-consumption operators

• Single-window clearances for construction and environmental permits

• Infrastructure status for data centres in select states, enabling easier credit access and lower capital costs

These incentives are aimed at ensuring time-bound capacity creation, attracting foreign direct investment (FDI), and boosting Make in India objectives through local data processing capabilities.

Leading and Emerging Players in the Ecosystem

Established players such as ST Telemedia Global Data Centres (STT GDC) and Sify Technologies continue to lead the market with large deployments in metro cities. However, the ecosystem is also witnessing a wave of new entrants and regional developers stepping up to fill the growing demand.

A standout example is Anant Raj Ltd, a Delhi-NCR-based infrastructure company, which has announced a capital expenditure of Rs. 18,000 crore (US$ 2.1 billion). The company plans to expand from its current 28 megawatts (MW) of data centre capacity in FY26 to an ambitious 307 MW by FY32.

“With pre-zoned sites, policy support, and robust power access, we are well-positioned to serve both public and private sector clients,” said Mr. Amit Sarin, Managing Director, Anant Raj Ltd.

This kind of long-term capacity planning and capital commitment reflects the strong investor confidence in India’s data infrastructure sector.

Power, Connectivity, and Location Advantages

The report emphasizes that location and power availability are two of the most critical success factors in data centre development. Ideal sites are those offering:

• Uninterrupted electricity supply, preferably backed by green energy sources such as solar or wind

• Proximity to fibre landing stations, which lowers latency and enhances cloud network performance

• Climate resilience and seismic stability for long-term structural viability

• Access to water resources, critical for cooling high-density server environments

Cities like Mumbai, Chennai, Noida, Hyderabad, and Pune are leading choices for hyperscale deployments. Meanwhile, cities like Nagpur, Indore, Jaipur, Kochi, and Bhubaneswar are gaining traction for edge deployments.

Global Trends Aligning with India’s Growth

India’s data centre story is not developing in isolation. Several global megatrends are reinforcing the country’s attractiveness:

• Rising AI workloads are driving demand for GPU-intensive server farms

• SaaS and fintech platforms require highly secure and low-latency backends

• Multinational cloud providers are investing in regional availability zones in India

• Regulatory alignment on data residency is prompting multinational corporations to localise operations

India’s combination of regulatory readiness, talent pool, and cost advantages makes it a compelling location for international data centre investments, both for captive and co-location models.

Summary

India is entering a transformational phase in its digital infrastructure journey, with data centre capacity projected to triple to 3 GW by 2030. This growth, driven by AI, cloud, localisation mandates, and investor confidence, presents a massive opportunity to shape India as a global digital hub. Backed by progressive government incentives, ambitious private investment plans, and a clear roadmap, the country is on track to bridge the future supply-demand gap and deliver next-generation data ecosystems across metros and emerging cities alike.

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