India’s data centre industry is on track to more than double its market size to $22 billion by 2030 from around $10 billion in 2025, fuelled by explosive demand from cloud computing, artificial intelligence workloads and a digital economy projected to surpass $1 trillion, according to the latest report from real estate advisory firm Vestian. The sector has already drawn $13-15 billion in investments between 2020 and 2024—with foreign institutional investors accounting for nearly 80% of inflows—and commands a staggering $60-70 billion pipeline over the next five years from global hyperscalers and domestic joint ventures.
Current operational capacity hovers at 1.4-1.6 gigawatts (GW) across 164 facilities nationwide, with over 700 megawatts (MW) under construction and 1-1.2 GW in advanced planning stages. Vestian forecasts installed capacity climbing to 1.7-2 GW by the end of 2026 and surging to 4-5 GW by 2030, mirroring global trends where total capacity is expected to exceed 100 GW this decade. Shrinivas Rao, CEO of Vestian, highlighted policy tailwinds: “India’s data centre sector is rapidly transforming on the back of strong policy support and rising digital demand,” citing single-window clearances, 20-year tax exemptions extending to 2047 and GST incentives that cement India’s Asia-Pacific hub status.
Digital Consumption and AI Drive Unprecedented Demand
The expansion reflects India’s digital boom: internet subscribers topping 1 billion, enterprise cloud migration accelerating and monthly wireless data usage exceeding 25 GB per user amid UPI dominance, OTT streaming and 5G rollout. AI and high-performance computing (HPC) workloads—led by hyperscalers like AWS, Microsoft Azure, Google Cloud and domestic players AdaniConneX, Yotta and Nxtra—demand high-density, scalable infrastructure. Global comparisons underscore India’s momentum: ranked 14th worldwide, it trails only China in APAC growth velocity, with construction costs at $6-7 million per MW versus $10-12 million in Singapore or Japan.
Hyperscale commitments abound: AdaniConneX’s 1 GW pipeline, Yotta’s ₹39,000 crore hyperscale campuses, CapitaLand’s Navi Mumbai facility and Airtel’s expansions signal confidence. By 2030, facilities over 50 MW could comprise two-thirds of inventory, shifting toward AI-optimised designs with green certifications rising to 30-40% via renewables.
Mumbai-Chennai Axis Dominates, Tier-IIs Accelerate
Mumbai commands 49% of capacity, bolstered by financial services proximity and robust connectivity; Chennai follows at 18% as a submarine cable gateway with multiple landing stations; NCR holds 11%. Secondary markets Pune (8%), Bengaluru (7%) and Hyderabad (5%) thrive on IT ecosystems and competitive power/land costs.
Tier-II exploration intensifies: Ahmedabad, Kochi, Jaipur and Visakhapatnam currently host 60-80 MW but eye 100+ MW by 2026, aided by state incentives, fibre upgrades and lower costs. Mumbai-Chennai added 44-42% of recent supply, but decentralisation mitigates risks like power constraints and urban land scarcity.
Power, Sustainability and Policy Catalysts
Data centres’ energy appetite—projected at 30% annual growth to 57 TWh by 2030 (2.6% of national demand)—poses challenges, but green initiatives like liquid cooling and renewables gain traction. Government measures—₹2.13 lakh crore incentives, data localisation mandates and Digital India—fortify the ecosystem. Rao envisions: “India as an emerging global hub for data centres and AI infrastructure.”
Vestian’s projections align with Avener Capital’s $20-22 billion capex to 5 GW and JLL’s 48% H1 2025 absorption, affirming structural tailwinds.
