India’s Data Centre Boom: What’s Driving the Surge?

India’s data center industry has been in the spotlight recently for various reasons, including one of the largest FDI efforts through Google’s USD 15 billion investment plan in shaping the country’s data center landscape and the Indian conglomerate Reliance’s target of building 3 GW of data centers, coupled with various growth drivers like rapid growth in AI & cloud infrastructure, increased internet penetration, and data consumption, all of which contribute to the exponential scale-up of the country’s data center capacity to 8 GW by 2030.  

Why is there a need for Data Centres?

The domestic data centre market is experiencing exponential growth, buoyed by various factors, including the accelerated digital transformation, expanding internet penetration, growing data consumption, and increased adoption of AI, cloud, and other cutting-edge technologies.  The internet penetration in India has grown from 33.4% in 2019 to 55.3% in early 2025, with 1,002.85 million internet subscribers as of April-June 2025.

Furthermore, the data consumption has also risen significantly, from 11.5 GB per user in 2019 to approximately 32 GB per user per month in 2025, backed by the expansion of 5G networks, affordable data plans, and growing demand for streaming and related services.

All these driving factors underpin the growing need for data centres in the country. Furthermore, the rapid transformation of digitalisation in the Banking & Financial Institutions (BFSI) sector in the country is also acting as one of the major demand drivers for Data centres. The growth in e-commerce services and cloud infrastructure, as well as increased AI workloads by technology firms and rapid growth in OTT, streaming, and related services, adds a further layer to the increasing demand for data centres in India.   

Current landscape of Data Centres

The domestic data centre capacity has witnessed significant growth, growing from 590 MW in 2019 to approximately 1.2 GW at present. Furthermore, according to Jefferies, the data centre capacity is anticipated to reach 8 GW by 2030, and it is expected to grow 17% annually, potentially making India among the fastest-growing data centre hubs worldwide.

As of 2024, the data centre industry revenue stood at USD 1.2 billion, and according to Statista, the DC industry revenue is expected to reach USD 11.53 billion by 2025. The country has over 260 data centres, with Mumbai Metropolitan Region (MMR), Chennai, Delhi, Hyderabad, and Bengaluru being the major data centre hubs. With approximately 70% of the total data centre stock contributed by MMR and Chennai, they continue to be the major hotspots for Data centre operators.

Moreover, as per data from Anarock Capital, approximately 60% of data centre clients are enterprises, 30% are hyperscalers, including larger data centre players like Microsoft, Amazon Web Services, and Google, and 10% are AI users. With a surge in AI workloads, the rapid growth of cloud infrastructure, and growing internet penetration, this would further lead to increased requirements for data centre services by enterprises, hyperscalers, and AI users.

Key Players of the DC industry

Major DC players, including Equinix, Digital Realty, NTT Global Data Centres, CyrusOne, Meta Platforms, and more, dominate the overall global data centre landscape and are also expanding their presence in India through subsidiaries and joint ventures. AdaniConnex, formed through a joint venture between the Adani Group and global data centre operator EdgeConneX, aims to develop 1 GW of data centre capacity over the next 10 years.

Another significant player includes Digital Connexion, a three-way joint venture among Digital Realty, Brookfield Infrastructure, and Jio Platforms. CtrlS is Asia’s largest Rated-4 data centre network, operating a large network of Tier-4 data centres across major cities, including Mumbai, Bangalore, Noida, and Hyderabad.

Several other key players in the DC segment include ST Telemedia Global Data Centres, which entered the market through a strategic partnership with Tata Communications; Yotta Data Services, a part of the Hiranandani Group; and Nxtra, the data centre arm of telecomm giant Bharti Airtel. 

Some of the key listed data centre companies in India include:

Black Box– A global digital infrastructure integrator specialising in network integration, digital connectivity, data centres, modern workplaces, and cybersecurity. Recently secured key data centre contracts from a top hyperscaler and a leading global colocation provider.

Anant Raj – A diversified real estate company developing IT parks, data centres, hospitality, office complexes, malls, and residential projects. Operates 28 MW of data centre capacity with cloud services and plans to scale to 307 MW by 2031-32.

Allied Digital Services Ltd – A global IT consulting firm delivering digital transformation, managed IT services, and master systems integration. Offers data centre hosting and management via ITaaS, with infrastructure in the US and India.

Netweb Technologies India – Specialises in high-performance computing solutions, including supercomputing, AI systems, and private clouds. Designs and manufactures HPC and data centre servers, providing servers, storage, workstations, software, and services with a focus on homegrown technology.

Larsen & Toubro – An Indian multinational engaged in EPC projects, hi-tech manufacturing, and global services. Its subsidiary, L&T Cloudfiniti, offers hyperscale data centres and multi-cloud solutions. Plans to expand capacity from 32 MW to 150 MW by 2027 with an investment of Rs 3,600 crore.

Aurionpro Solutions – A platform-led technology provider driving digital innovation across banking, mobility, payments, and government. Provides banking software, consulting, and end-to-end data centre services, including design and turnkey build-outs, with emphasis on AI and high-performance computing.

Kirloskar Oil Engines – A leading Indian manufacturer of diesel engines, generator sets, and pumps for agriculture, power, and industry. Supplies data centre power solutions, including high-performance diesel generators and advanced cooling systems.

Bajel Projects Ltd – A leading EPC company in power infrastructure, specialising in transmission and distribution. Entered the data centre sector in 2024 with a 220/33kV GIS substation and transmission line extension for a colocation facility in Navi Mumbai.

Major Investments/Developments

According to a report by Anarock Capital, the total equity invested in the domestic DC industry through PE investments, JVs, and acquisitions was USD 6.5 billion. The domestic DC industry is expected to witness a surge in investment, which is anticipated to reach USD 50 billion in the next 5-7 years by global hyperscalers like AWS, Google, and Microsoft, as well as domestic conglomerates like Adani Group and Reliance Industries.

Earlier this year, AWS announced its plan to invest USD 8.3 billion to expand its cloud infrastructure in Mumbai, India. Moreover, the recent development in the data centre landscape, where Google is planning to establish an AI hub in Visakhapatnam, Andhra Pradesh, with an investment of approximately USD 15 billion (2026-2030), acts as a major catalyst for the growth of the domestic DC industry.

Indian conglomerates, like Mukesh Ambani’s Reliance, are also planning a 3 GW  data centre in Gujarat, with an investment of around USD 20-30 billion, and Adani Group’s AdaniConnex, which presently operates less than 40 MW, is aiming to scale towards 210 MW sooner. Additionally, Delhi-based realty player Anant Raj has announced plans to invest around USD 2 billion, with a vision to expand its data centre capacity to around 307 MW by 2031-32.  

Outlook

The data centre industry is currently at a nascent stage in India, with major players like NTT Global Data Centre, ST Telemedia Global Data Centres, Reliance, and Adani Group expanding their capacity significantly. Data centres need larger, litigation-free land, which highlights the regulatory constraints that many players could face. Furthermore, as data centres require huge amounts of energy, this could also impact the country’s electricity demand and supply.   

Written By Adhvaitha Nayani BA

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