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India’s data centre market is projected to more than double in value over the next five years, reaching USD 22 billion by 2030, according to a new report by real estate consultancy Vestian. The sector, currently valued at approximately USD 10 billion in 2025, is seeing a massive surge driven by the rapid adoption of cloud services, artificial intelligence (AI) workloads, and a significant increase in digital consumption across the country.

The report highlights that India is emerging as a strategic hub in the Asia-Pacific data infrastructure landscape. This growth is supported by a fast-growing digital economy, government policy incentives, and substantial investments from global hyperscale operators. Layoffs Due to AI: Indian IT Firms Cut US Onsite Jobs As Adoption of Artificial Intelligence Accelerates and Large Deals Slow.

India Data Centre Sector: Investment Momentum and Global Expansion

The industry has maintained strong investment momentum, attracting between USD 13 billion and USD 15 billion between 2020 and 2024. Notably, foreign institutional investors accounted for nearly 80% of these total inflows. Looking ahead, the sector is poised for even greater capital infusion, with announced investments of USD 60 billion to USD 70 billion expected over the next five years.

This domestic growth mirrors a global trend where data centre capacity is expanding rapidly. Global installed capacity, currently estimated at 40–50 gigawatts (GW), is expected to exceed 100 GW by the end of the decade. In India, operational capacity currently stands at 1.4–1.6 GW across 164 facilities, with projections suggesting a rise to 4–5 GW by 2030.

India Data Centre Sector: Key Drivers of Digital Infrastructure

The expansion is primarily fueled by a surge in internet subscribers and increasing enterprise cloud adoption. The scaling of AI and high-performance computing has created a need for specialized infrastructure, while the rollout of 5G and the popularity of OTT platforms have pushed average monthly wireless data usage above 25 GB per user.

Shrinivas Rao, CEO of Vestian, noted that policy support has been a cornerstone of this transformation. "Incentives such as single-window clearances, long-term tax exemptions, and GST benefits position India as an emerging global hub for data centres and AI infrastructure," Rao stated. Additionally, India maintains a structural cost advantage, with construction costs per megawatt (MW) estimated at USD 6–7 million, significantly lower than mature markets like Singapore and Japan.

India Data Centre Sector: Regional Hubs and Tier-II Growth

Mumbai continues to lead as India’s primary data centre hub, accounting for 49% of the country's operational capacity. Chennai follows at 18%, benefiting from its strategic role as a global data gateway with multiple submarine cable landing stations. Other significant markets include the National Capital Region (11%), Pune (8%), Bengaluru (7%), and Hyderabad (5%). AI Adoption in American Workplaces Increases Amid Growing Concerns Over Job Displacement.

Beyond these major metros, operators are increasingly looking toward Tier-II cities such as Ahmedabad, Kochi, Jaipur, and Visakhapatnam. These emerging markets currently hold 60–80 MW of capacity, which is expected to cross 100 MW by the end of 2026. This shift is being aided by lower land costs, improved connectivity, and supportive state-level policies.

(The above story first appeared on LatestLY on Apr 13, 2026 02:51 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).