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India is Staking Its Claim as a Global Data Centre Powerhouse

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India is on the cusp of a massive data infrastructure transformation. Once viewed as a back-office outsourcing hub, the country is now staking its claim as a potential global powerhouse in data centre operations. With an explosive surge in internet consumption, the integration of AI, and an expanding digital economy, India is uniquely poised to become a regional — and possibly global — data centre hub. 

The Growth Story 

The scale and pace of growth are staggering. India’s data centre industry clocked $1.2 billion in revenue in 2024, growing over 20% annually. From 590 MW in 2019 to 1.4 GW in 2024, the sector is expected to surpass 9 GW by 2030. Hyperscalers like AWS, Google Cloud, and Microsoft Azure are doubling down on their investments, while domestic giants like Airtel, Reliance, and Adani are ramping up capacity at unprecedented rates. 

Airtel’s Nxtra, the current market leader, plans to invest $600 million to double its capacity to 400 MW by 2027. With a 24% stake from Carlyle and ambitions to become the number one or two player, Nxtra is tapping into the country’s burgeoning demand, fueled by digital transactions, streaming platforms, and AI applications. 

Why India, Why Now? 

India offers a potent mix of advantages: competitive land and power costs, a vast and skilled workforce with over 375,000 AI-trained professionals, and strong domestic demand. Crucially, government policy now mandates that most data be stored within the country, boosting the case for local infrastructure development. 

Despite the rising interest, the country remains underpenetrated — just 1 MW of data centre capacity per million users, compared to 51 MW in the U.S. and 4 MW in China. Yet India generates nearly 20% of global data and only hosts 3% of the world’s data centre capacity. That imbalance offers a clear opportunity for explosive growth. 

Infrastructure Challenges Ahead 

But the boom comes with growing pains. Data centres are notoriously power-hungry, and India’s state-owned grids are already under pressure. While government projections expected a 6.4% annual rise in power demand till 2030, the current rate is closer to 9%, according to the Council on Energy, Environment and Water (CEEW). Nomura projects data centres could consume over 3% of India’s electricity by 2030, up from just 0.5% today. 

Ashish Arora, CEO of Nxtra, cautions that while India has the land and technical capacity, most state power distribution companies are not financially equipped to support the kind of energy infrastructure upgrades the sector demands. 

The Investment Landscape 

India’s largest conglomerates are entering the fray. Mukesh Ambani’s Reliance is building AI-ready, gigawatt-scale data centres in Gujarat powered by green energy. Adani Group, with expertise in renewables, has partnered with EdgeConneX to develop 1 GW of capacity. Meanwhile, global players continue to buy up land across Tier-I cities, especially Mumbai, which alone accounted for 53% of total absorption in 2024. 

According to Savills India, 407 MW of IT capacity was absorbed in 2024, with another 600 MW expected in 2025. Over 200 acres of land were acquired in cities like Mumbai, Hyderabad, Chennai, and Pune to accommodate this growth. 

Interestingly, a silent revolution is also taking shape in Tier-II and Tier-III cities such as Bhubaneswar, Jaipur, Vizag, and Coimbatore, driven by the rising penetration of 5G and mobile apps. This has fueled the emergence of edge data centres — smaller facilities located closer to end users to reduce latency and improve performance. 

A Sector in Flux, A Future in Focus 

Despite intense competition driving down prices to as low as $80 per kilowatt per month (compared to $200 in Indonesia), the Indian data centre market remains robust and resilient. Presently, international cloud providers account for only 40% of shared capacity, with the rest coming from Indian enterprises — the BFSI sector alone consuming 90% of this domestic load. 

India is not just a passive recipient of global tech trends; it is shaping them. As AI, 5G, and IoT adoption grow, so will the country’s need for low-latency, high-capacity data infrastructure. With an eye on the future, the push toward sustainability, energy innovation, and digital sovereignty will define how India scales this infrastructure revolution. 

If challenges around energy, land acquisition, and policy coherence are addressed, India may very well serve the world — not just with code, but with computing power. 

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