India’s data centre market is projected to more than double to $22 billion by 2030 from about $10 billion in 2025, driven by rising Cloud adoption, artificial intelligence (AI) workloads, and rapid growth in digital consumption, according to a report by Vestian.

Investment momentum in the sector also remains strong. Between 2020 and 2024, India’s data centre industry attracted about $13–15 billion in investments, with foreign institutional investors accounting for nearly 80 per cent of total inflows.

Announced investments of $60–70 billion over the next five years underscore the continued interest from hyperscale operators and joint-venture platforms.

Globally, the data centre industry is experiencing rapid expansion, with installed capacity currently estimated at 40–50 gigawatts (Gw) and expected to exceed 100 Gw by the end of the decade. Against this backdrop, India is emerging as a strategic destination in the Asia-Pacific data infrastructure landscape, supported by policy incentives, hyperscaler investments, and a fast-growing digital economy.

India’s operational data centre capacity currently stands at about 1.4–1.6 Gw across 164 facilities, with more than 700 megawatts (Mw) under construction and another 1–1.2 Gw in the planning stage, the report said. Installed capacity is expected to rise to 1.7–2 Gw by the end of 2026 and further expand to 4–5 Gw by 2030, reflecting sustained infrastructure build-out across key markets.

The expansion is being driven by a surge in internet subscribers, increasing enterprise cloud adoption, and the rapid scaling of AI and high-performance computing workloads. Growth in digital payments, over-the-top (OTT) platforms, and the rollout of 5G services has further accelerated data consumption, with average monthly wireless usage exceeding 25 GB per user, reinforcing demand for scalable storage and processing infrastructure.

“India’s data centre sector is rapidly transforming on the back of strong policy support and rising digital demand,” said Shrinivas Rao, chief executive officer (CEO) at Vestian. He added that incentives such as single-window clearances, long-term tax exemptions, and goods and services tax (GST) benefits position India as an emerging global hub for data centres and AI infrastructure over the coming decades.

India also retains a structural cost advantage, with construction costs estimated at $6–7 million per Mw, significantly lower than mature Asia-Pacific markets such as Singapore and Japan. This cost competitiveness continues to support large-scale capacity additions across metro and emerging locations.

Mumbai remains India’s largest data centre hub, accounting for nearly 49 per cent of operational capacity, followed by Chennai (18 per cent) and the National Capital Region (11 per cent). Pune (8 per cent), Bengaluru (7 per cent), and Hyderabad (5 per cent) are emerging as important secondary markets supported by strong information technology (IT) ecosystems and competitive operating conditions.

Chennai’s role as a global data gateway, supported by multiple submarine cable landing stations, continues to strengthen its strategic importance, while Mumbai benefits from strong connectivity infrastructure and proximity to financial services demand.

Operators are also increasingly exploring Tier-II cities such as Ahmedabad, Kochi, Jaipur, and Visakhapatnam to support distributed digital infrastructure expansion. Operational capacity in these markets is currently estimated at 60–80 Mw and is expected to cross 100 Mw by the end of 2026, aided by improving connectivity, supportive state policies, and lower land costs.