Blurb
India’s data centre market is projected to reach $6.8 billion by FY30, driven by AI, cloud adoption, digital growth, and strong investments.
New Delhi
India’s data centre market is projected to grow fourfold to $6.8 billion by FY30, driven by artificial intelligence (AI), cloud computing, and rising digital consumption, according to a KPMG in India report.
The report estimates that India’s share of the global data centre market will nearly double from 2–3 per cent in FY26 to around 5 per cent by FY30, supported by strong demand, large-scale investments, and favourable government policies.
India’s installed data centre capacity has already more than tripled since FY19 to about 1.9 gigawatts (GW) in FY26, with an additional 4.5 GW expected over the next five years. The expansion is being fuelled by hyperscale cloud providers, global digital platforms, and AI-focused companies, replacing the earlier dominance of enterprise and telecom demand.
AI and high-performance computing are expected to become the primary growth drivers, accounting for nearly 55 per cent of total capacity by FY30. This shift is prompting investments in AI-ready infrastructure with advanced cooling systems, higher power density, and GPU-intensive computing capabilities.
The report highlights India’s competitive advantages, including lower construction costs, affordable power, and a large pool of IT and AI professionals. These factors position the country as an attractive destination for global digital infrastructure investments.
Rapid digital adoption is also accelerating demand, with more than 950 million internet users, over 660 million smartphone users, and rising data consumption across sectors. The implementation of data localisation regulations, including the Digital Personal Data Protection (DPDP) Act, is expected to further boost domestic demand for data centres.
According to the report, over $120 billion has already been committed by hyperscale cloud companies, global operators, and Indian firms, reflecting strong investor confidence in the sector.
Industry experts believe the convergence of AI, capital investment, and supportive policy frameworks is placing India at the forefront of global digital infrastructure development, making the country an increasingly important hub for next-generation data centre capacity.
BOX
- India data centre market to quadruple
- AI and cloud drive rapid expansion
- Capacity expected to reach 6.4GW
- Government policies boost infrastructure investments
- India emerges global digital infrastructure hub