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Massive Growth Ahead for India’s Data Centre Industry

Massive Growth Ahead for India’s Data Centre Industry

Katravath Sanjay
November 9, 2025

India’s data centre industry is entering a transformative phase, with capacity projected to expand fivefold to 8 gigawatts (GW) by 2030, according to a sectoral report by Jefferies, a global financial services and investment firm known for its comprehensive industry analysis. The report attributes this surge to explosive data consumption, rapid cloud adoption, AI-driven computing demands, and India’s evolving data localisation policies under the Digital India framework.

A data centre is a specialised facility that houses servers, networking systems, and storage infrastructure to manage, process, and protect vast volumes of digital information forming the backbone of the global digital economy. As India’s digital ecosystem expands through fintech, e-commerce, and AI applications, these facilities are becoming essential to the country’s technological self-reliance.

Currently, India has around 180 operational data centres with a combined installed capacity of 1.7GW. An additional 3GW of capacity is under construction across major hubs such as Mumbai, Chennai, Hyderabad, Bengaluru, Pune, Visakhapatnam, and Noida. Together, these cities account for over 60 per cent of the country’s data centre expansion pipeline. Many of these are hyperscale projects being developed by AdaniConneX, NTT Global Data Centers (GDC), Reliance Industries, Bharti Airtel’s Nxtra Data, and CtrlS Datacenters. Once operational, this pipeline will push India’s active capacity to 4.7GW, laying a strong foundation for the 8GW target by the end of the decade.

Jefferies estimates that achieving this expansion will require an investment of nearly ₹2.5 lakh crore (USD 30 billion), with data centre leasing revenues expected to climb to ₹67,000 crore (USD 8 billion) by 2030. The report breaks down this capital outlay across key allied sectors: ₹50,000 crore for real estate and construction, ₹83,000 crore for electrical and power systems, ₹58,000 crore for racks and fit-outs, ₹33,000 crore for advanced cooling systems, and ₹8,000 crore for network infrastructure.

Currently, Mumbai and Chennai dominate India’s data centre landscape, together accounting for nearly 70 per cent of total installed capacity. Mumbai alone hosts about half, driven by its proximity to undersea cable landing stations and the dense concentration of banking and financial services (BFSI) firms. Chennai, with roughly 20 per cent share, is emerging as the next key hub, benefitting from coastal connectivity, land availability, and an expanding digital manufacturing ecosystem. Other cities particularly Hyderabad, Noida, and Pune are fast evolving as secondary data centre zones, supported by state incentives and reliable power access.

According to the report, the top five players are NTT GDC, AdaniConneX, Reliance Industries, Sify Technologies, and CtrlS Datacenters are collectively control nearly 90 per cent of the market. Among these, NTT GDC leads with about 20 per cent share, followed closely by AdaniConneX and Reliance, which together account for roughly one-third of upcoming capacity additions.

A major growth catalyst identified by Jefferies is the AI revolution. The report notes that AI servers consume five to six times more power and require advanced liquid cooling systems compared to traditional setups. This has triggered significant investment in energy-efficient high-density infrastructure, renewable power sourcing, and sustainable cooling technologies. Industry leaders are increasingly integrating solar and hybrid energy systems to reduce operational costs and align with India’s carbon neutrality targets.

Policy initiatives are also accelerating this momentum. The Digital Personal Data Protection (DPDP) Act, 2023, and the Reserve Bank of India’s data localisation guidelines mandate that sensitive personal and financial data be stored and processed within Indian borders. These measures, coupled with state-level data centre policies in Maharashtra, Tamil Nadu, Telangana, and Uttar Pradesh, have made India one of the most attractive markets for digital infrastructure investment in the Asia-Pacific region.

However, experts caution that this rapid expansion comes with challenges. The industry’s high power demand, dependence on reliable electricity supply, and significant water use for cooling could strain urban infrastructure if not managed sustainably. Energy analysts also emphasise the need for renewable integration, grid resilience, and policy harmonisation to prevent regional imbalances in data infrastructure distribution.

Global comparisons highlight the scale of India’s ambition. With the projected 8GW capacity, India is set to surpass regional hubs like Singapore (1.5GW) and Japan (3GW), approaching the United States’ 12GW benchmark by the end of the decade. This would position India as a top-three global data centre market, serving not only domestic enterprises but also multinational cloud providers such as Amazon Web Services (AWS), Google, Microsoft, and Equinix.

Jefferies concludes that India is well-positioned to achieve its 8GW capacity target by 2030, given that 4.7GW (nearly 60 per cent) is already operational or under construction. Yet, the report also notes that long-term success will depend on policy consistency, energy efficiency, and infrastructure readiness.

As India races toward this milestone, the data centre boom is expected to reshape its digital economy driving investments, generating employment, and enhancing data sovereignty while challenging policymakers to balance economic growth with sustainability and energy security.

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