By 2030, India's data center capacity is projected to surpass 4,500 Megawatts, with considerable investments estimated at between $20 and $25 billion.
The Indian data center industry is set for exponential growth, projected to surpass 4,500 MW of capacity by 2030. This expansion is driven by a multitude of factors, including accelerating digitalization, supportive government policies, and a rising demand for data storage. The sector is also expected to attract investments between $20-$25 billion over the same period.
According to a report by Colliers, the growth will result in a demand for approximately 55 million square feet of real estate for data centers over the next five to six years. Large facilities exceeding 50 MW will likely constitute nearly two-thirds of the total data center stock by the end of the decade. Real estate and construction costs account for around 30 to 40 percent of the total development expenses.
India's data center investments reached $14.7 billion between 2020 and April 2025. Foreign institutional investors contributed about 86 percent of the total capital inflow, with Mumbai and Chennai receiving 61 percent of the investment.
As of April 2025, India's total data center capacity across the top seven cities stood at 1,263 MW, spread across nearly 16 million square feet. This represents a more than 3.6X increase in capacity compared to 2020. Mumbai remains the largest data center hub, accounting for 41 percent of the total capacity, followed by Chennai (23 percent) and Delhi-NCR (14 percent). Tier II and III cities like Vijayawada, Mohali, and Jaipur are emerging as new destinations for data centers, driven by the demand for low-latency services and state-led digital policies.
Sustainable data center operations are gaining momentum in India, with 25 percent of DC capacity already green certified. This figure is expected to increase to 30-40 percent by 2030. As of April 2025, green-certified data center capacity nearly doubled from 159 MW in 2020 to 314 MW, with Mumbai and Chennai making up almost three-fourths of the total.
The rollout of 5G and increased focus on edge computing are expected to significantly boost edge data center capacity, from about 60-70 MW in 2025 to 300-400 MW by 2030. These smaller facilities, located closer to end-users, offer faster processing and lower latency for real-time applications, particularly in Tier II and III cities. The segment is poised to grow at a compound annual growth rate (CAGR) of 35-40 percent over the next five years.
The growth of the data center industry is underpinned by strong policy support, including initiatives like the Digital India Mission, National Broadband Mission (2.0), and the Data Protection Bill 2023. Since 2022, the industry has held infrastructure status,streamlining access to funding and encouraging further development. Experts predict that the Indian data center market will mature amidst increasing demand, supportive government policies, and the country's continued commitment towards digital transformation.
Increased submarine cable projects and inland connectivity, growing demand for cloud services, big data and IoT investments, and India's aggressive digital transformation goals further support the growth of the data center industry. The country currently hosts 152 operational data centers, highlighting its strategic importance in the Asia-Pacific region. Major companies like OVHcloud and Digital Realty have recently established data centers in Mumbai and Chennai, respectively, reflecting the sector's investment potential.
- With the data center industry's growth, there's a predicted surge in investment for digital-finance and DeFi, as data storage needs escalate.
- The boom in data centers will also lead to increased investments in the real-estate sector, given the demand for data center facilities surpassing 55 million square feet.
- Technology companies might find investing in India's data centers an attractive prospect, courtesy of the Indian economy's accelerating digitalization and government support for the sector.
- As India's data center market matures, it may draw more attention from investors focused on cloud-computing and data-driven industries due to the increasing demand for cloud services, big data, and IoT.
- The introduction of proper data protection laws, like the Data Protection Bill 2023, could also encourage investment in the data center sector by reassuring potential investors about the protection of sensitive financial data.
