India is witnessing a massive surge in demand for data centres and AI infrastructure as businesses, governments and global technology firms rapidly expand digital operations across the country.
What was once limited to small server rooms inside office buildings has now transformed into a large-scale infrastructure boom focused on giant facilities powered by GPUs, fibre networks, cooling systems and high-performance servers.
According to the Ministry of Electronics and IT, India’s data centre capacity has increased from 375 MW in 2020 to more than 1,500 MW in 2025. Investment bank Morgan Stanley estimates this capacity could grow nearly 6 times to 10.5 GW by 2031.
One of the biggest drivers behind this growth is India’s push for data localisation through regulations such as the Digital Personal Data Protection Act and sector-specific rules from the RBI and SEBI. The goal is to keep sensitive Indian data within the country.
Artificial intelligence is also accelerating demand for advanced computing infrastructure. AI systems require powerful GPUs, fast storage, large memory capacity and advanced cooling technologies that traditional server systems cannot support.
Madhusudan Bhor said, “Cloud and enterprise digitisation created the base, while AI is now accelerating the need for high-performance compute, GPUs, large memory and fast storage.”
Major Indian companies are making large investments in the sector. Adani Group announced a $100 billion plan to build renewable-powered AI-ready data centres by 2035, while Reliance Industries committed $120 billion toward digital and AI infrastructure.
Global technology companies are also expanding rapidly in India. Google recently started work on a large AI hub near Visakhapatnam, while Microsoft and Amazon Web Services have announced multi-billion-dollar investments in Indian cloud and AI infrastructure.
The government is supporting the sector through tax incentives, policy reforms and the BharatNet expansion programme.
Industry experts believe the boom could create a new generation of technology jobs focused on AI infrastructure, cybersecurity, GPU management, fibre networks, liquid cooling and digital interconnection systems.
Despite rapid growth, experts say India still needs stronger electricity grids, semiconductor supply chains, fibre connectivity and coordinated policy support to compete globally in AI infrastructure.
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