India's Data Centre Industry: Projected $20–25 Billion Investment Surge by 2030

India's data centre sector is experiencing a significant transformation, with projections indicating an influx of $20–25 billion in investments over the next six years. This growth is anticipated to elevate the country's data centre capacity from 1,263 megawatts (MW) in April 2025 to over 4,500 MW by 2030, marking a substantial expansion in the nation's digital infrastructure.

Data centre capacity represents total IT load capacity, including occupied as well as unoccupied space. | Business Standard

Key Drivers of Growth

Several factors are contributing to this rapid expansion:

• Digital Transformation: The widespread adoption of artificial intelligence (AI), cloud computing, and the Internet of Things (IoT) is driving the demand for robust data storage and processing capabilities.

• Government Initiatives: Policies such as the Data Center Policy 2021 and the Information Technology Policy 2022 are fostering a conducive environment for data centre development.

• Strategic Location: Cities like Mumbai and Chennai are emerging as primary hubs, collectively accounting for nearly two-thirds of India's data centre capacity.

Investment Trends and Future Outlook

• Institutional Investments: In the first quarter of 2025 alone, institutional investments in Indian real estate reached $1.3 billion, with a significant portion directed towards data centre infrastructure.

• Infrastructure Expansion: The sector's physical footprint is projected to grow from 15.9 million square feet to approximately 55 million square feet by 2030, accommodating the increasing demand for data services.

• Regional Development: Emerging markets in Tier II and III cities are attracting investments, with companies like Microsoft and Amazon committing substantial funds to establish data centres in these regions.

Challenges and Considerations

While the growth prospects are promising, the sector faces challenges that need to be addressed:

• Infrastructure Strain: The rapid expansion may place pressure on existing power grids and other utilities, necessitating upgrades to support increased demand.

• Environmental Impact: Ensuring sustainable practices in data centre operations is crucial to mitigate environmental concerns associated with energy consumption.

Conclusion

India's data centre industry is on the cusp of a significant transformation, driven by technological advancements and strategic investments. With continued support from both the public and private sectors, the country is poised to become a leading player in the global data infrastructure landscape by 2030.

(Sources: Business Standard, Moneycontrol, Financial Express)