India’s data centre industry is set for rapid expansion over the next few years, driven by growing AI adoption, hyperscale cloud investments, and the country’s fast-growing digital economy. A new industry report projects that India’s operational data centre capacity will increase from 2.2 GW in 2025 to 12 GW by 2030.
The report estimates that AI-dedicated data centre capacity will grow from 275 MW in 2025 to 6,546 MW by 2030. At the same time, electricity demand from data centres is expected to rise from 10 TWh in 2025 to 191 TWh by 2040.
Speaking about the findings, Souhardya Pal, Research Associate at Wood Mackenzie, said, “India’s data centre market becomes a structural investment thesis. The convergence of hyperscale capital, AI workload growth and a decade of policy support have created the conditions for India to rival any market in Asia-Pacific. The question for developers and investors is no longer whether to enter India, but where and how.”
The report noted that India’s digital economy is valued at ₹32 lakh crore in 2025, contributing nearly 12% of the country’s GDP. It also highlighted more than 1.03 billion active internet users, around 22 billion monthly UPI transactions, and an AI market expected to reach ₹11.7 lakh crore by 2032.
Currently, Maharashtra and Tamil Nadu account for around 65% of the country’s installed IT load. However, future investments are expected to expand into Andhra Pradesh, Telangana, Uttar Pradesh, and Karnataka. These states are attracting investments from global hyperscalers, including Amazon Web Services and Google, as well as domestic operators such as AdaniConnex, which has announced a 2.6 GW development pipeline.
The report also identified reliable electricity supply as the biggest challenge for the sector, replacing land and capital as the primary concern. It further warned that water availability could become a major issue, especially in water-stressed states such as Tamil Nadu and Karnataka, as AI-driven computing increases cooling requirements.
The report concluded that India’s growing digital ecosystem, AI adoption, supportive policies, and renewable energy expansion are making it one of the world’s fastest-growing data centre markets. However, long-term success will depend on securing reliable power, managing water resources, and selecting locations with resilient infrastructure.
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