New Delhi, July 10, 2025 – India’s data centre sector is set for a major boom, with an estimated ₹1.6 lakh crore (₹1.6 trillion) in investments projected over the next five years, according to a recent report by India Ratings and Research (Ind-Ra). The investment surge is being driven by rapid digitalization, increasing demand for cloud services, and government initiatives promoting data localisation and digital infrastructure growth.
India’s digital economy has been expanding rapidly due to rising smartphone usage, growing internet penetration, and the widespread adoption of digital payments. Additionally, emerging technologies like artificial intelligence (AI), machine learning (ML), and big data analytics are further accelerating the demand for advanced storage and computing solutions.
The report indicates that around 650–700 megawatts (MW) of new data centre capacity is expected to be added by the financial year 2030, significantly enhancing the country’s digital infrastructure.
Investment activity will be concentrated in metro cities like Mumbai, Hyderabad, Chennai, Bengaluru, and Delhi-NCR. Mumbai continues to dominate the sector due to its established network, submarine cable landing stations, and power supply. However, Chennai and Hyderabad are rapidly gaining momentum thanks to favourable coastal locations and proactive state policies.
Sustainability is also becoming a key focus area. Many new data centres are being designed as green facilities, incorporating renewable energy sources, energy-efficient cooling systems, and eco-conscious architecture. Developers are increasingly targeting certifications such as LEED and IGBC to align with global ESG standards.
Government support through initiatives like the Digital India mission, the upcoming Data Protection Bill, and state-level data centre policies in Maharashtra, Telangana, Uttar Pradesh, and Tamil Nadu are further strengthening investor confidence. The sector has also benefited from 100% FDI under the automatic route and inclusion in the Production Linked Incentive (PLI) scheme.
Looking ahead, India is likely to more than double its current data centre capacity by 2030. This growth will be driven by demand from key sectors including banking and financial services, e-commerce, OTT streaming, telecom, and cloud providers. The rollout of 5G technology is also expected to promote the rise of edge data centres in tier-II and tier-III cities.
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Key Takeaways:
- Investment forecast: ₹1.6 lakh crore by FY30
- Capacity addition: 650–700 MW
- Growth centres: Mumbai, Chennai, Hyderabad, Bengaluru
- Drivers: Cloud adoption, data localisation, digital economy
- Supportive policies: PLI, 100% FDI, state incentives
- Focus on sustainable and green data centres
India is positioning itself as a global data hub, and with the right mix of infrastructure, investment, and policy support, the country is well on its way to becoming a leader in the digital infrastructure space.
Source: Based on a report covered by Business Standard – Read Original
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