At a glance
India’s data centre capacity is projected to reach 8 gigawatts by 2030, rising from 1.4 gigawatts in mid-2025. This rapid expansion is driven by surging data consumption, cloud adoption, and the intensive requirements of AI.
Executive overview
The Economic Survey 2025-26 highlights a significant growth opportunity for India to bridge its digital infrastructure gap. While the nation generates nearly 20 percent of the world’s data, it currently hosts only 3 percent of global data centres. Addressing structural constraints, including energy stability and water scarcity, remains critical for India to compete effectively with emerging regional hubs.
Core AI concept at work
High-performance computing infrastructure refers to the specialized hardware and physical facilities required to process complex AI workloads. These systems utilize advanced processors and cooling technologies to handle the massive mathematical operations necessary for training and deploying deep learning models. They provide the foundational power and storage that allow artificial intelligence systems to function.
Key points
- India’s data centre capacity is forecast to grow nearly sixfold by 2030 to meet the computational demands of a digital economy.
- AI workloads introduce extreme volatility in power demand which poses significant risks to the stability of existing national electricity grids.
- Domestic policy initiatives like Make in India and Atmanirbhar Bharat are actively supporting the local manufacturing of critical electronics and semiconductors.
- Competitive pressure from regional hubs in Malaysia, Japan, and Vietnam necessitates the removal of structural barriers such as restrictive building codes.
Frequently Asked Questions (FAQs)
What is driving the projected growth of India’s data centre capacity?
Growth is primarily fueled by the rapid adoption of cloud services and the intensive processing needs of artificial intelligence and 5G technologies. Increasing domestic data consumption and government digital initiatives also necessitate the expansion of physical hosting infrastructure.
How does AI infrastructure expansion affect the national power grid?
AI data centres require constant and massive amounts of electricity, leading to higher energy costs and potential instability in power supply. The shift toward intermittent renewable sources like solar and wind further complicates the ability of the grid to maintain consistent delivery.
Why is there a competitiveness gap in India’s data centre market?
India produces 20 percent of global data but hosts only a small fraction of the world’s data centres due to energy and hardware constraints. To close this gap, the government is focusing on policy deregulation and providing incentives to attract global infrastructure players.
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FINAL TAKEAWAY
India’s transition toward an 8 gigawatt capacity marks a critical phase in its digital infrastructure evolution. Success depends on balancing the high energy and water demands of AI workloads with the need for stable, sustainable utility grids and favorable regulatory environments.
[The Billion Hopes Research Team shares the latest AI updates for learning and awareness. Various sources are used. All copyrights acknowledged. This is not a professional, financial, personal or medical advice. Please consult domain experts before making decisions. Feedback welcome!]
