India’s data centre capacity is projected to reach 7.5 GW by March 2030, attracting over ₹3 lakh crore in investments amid rising AI demand and power infrastructure challenges.
India’s data centre capacity is projected to increase five-fold to 7.5 GW by March 2030, with investments exceeding ₹3 lakh crore.
India’s data centre capacity is expected to increase five-fold to around 7.5 gigawatts (GW) by March 2030. The economy is attracting more than ₹3 lakh crore in investment over the next four financial years, as demand for artificial intelligence (AI), cloud computing and digital services accelerates.
Rising demand for generative AI (GenAI) computing, greater enterprise digitalisation, and increasing data consumption are driving the expansion. However, the pace of development will depend on timely power connections, regulatory approvals, and developers’ ability to complete projects within planned costs and timelines.
Nearly Half of Upcoming Data Centre Capacity Already Contracted
Demand visibility remains strong, with nearly half of the planned capacity already committed through long-term contracts. Existing data centre facilities in India are operating at around 90% utilisation, while more than 95% of capacity currently under construction has already been contracted.
According to Crisil Ratings, development costs in India are around 20% lower than in several competing Asia-Pacific markets, supported by relatively competitive land, construction and labour costs. Lower electricity tariffs further help, with data centre rentals estimated to be 30-35% cheaper than in comparable markets.
Anand Kulkarni, Director at Crisil Ratings, said India’s ability to develop large campuses powered by renewable energy also strengthens its appeal among global hyperscalers.
Also Read: Andhra Pradesh Plans 70% Renewable Energy Rule for Data Centres in Visakhapatnam
Power Infrastructure Emerges as a Major Constraint
The planned expansion could put considerable pressure on electricity infrastructure. Around three-fourths of the approximately 6 GW of upcoming capacity is expected to be concentrated in Visakhapatnam, Mumbai and Hyderabad.
By fiscal 2030, the additional data centre demand in these cities could equal around 80%, 60% and 20%, respectively, of their existing peak power demand. Timely grid connections and transmission infrastructure upgrades will therefore be important.
Also Read: AI Demand Outpaces Infrastructure as Islanded Data Centres Gain Ground
Hyperscaler Dependence and Debt Pose Risks
Hyperscalers are expected to account for 75-80% of India’s data centre capacity by fiscal 2030, up from 60-65% in fiscal 2026. While long-term contracts provide revenue visibility, greater dependence on a few large customers could expose developers to pricing pressure as new capacity enters the market.
Contract periods have also increased from 10-12 years to 15-20 years, improving revenue certainty. However, developers must upgrade existing facilities to handle newer GenAI workloads, including higher power requirements and advanced cooling systems.
Crisil Ratings expects debt levels to remain elevated in the medium term, as investments generally precede revenue generation by 24-36 months. Project commissioning and higher utilisation will be important in improving financial leverage.
India’s data centre opportunity will increasingly be measured by its ability to secure power, commission projects on time and sustain demand from hyperscalers, rather than capacity announcements alone.
Samarjit Kaur is a journalist and communications professional covering technology & emerging digital trends. With a focus on clarity and context, she reports on developments shaping industries and governance. When not reporting, she chooses to plug-in and relax on her playlists and plan her next bucket-list trips!