India’s Data Center Capacity Set to Surge, Attracting Rs. 1.5 Lakh Crore Investment
Data Center Capacity Forecasts Reach 4 Gigawatts by FY30
New Delhi, March 25 – India’s data center capacity is projected to reach approximately 4 gigawatts (GW) by fiscal year 30, potentially attracting investments totaling Rs. 1.5 lakh crore during that period, according to a report released on Wednesday.Current Capacity and Global Comparison
India’s data center capacity currently stands at 1.2 megawatts per million users, significantly lower than the global average of 5 megawatts per million users. The country’s share of the global data center market was approximately 4% in 2025, with a capacity of 1.2 gigawatts.Growth Trajectory and Revenue Projections
Between fiscal years 22 and 25, India’s co-location data center capacity doubled to 1.2 gigawatts, maintaining an average utilization rate exceeding 90%, as reported by CareEdge Ratings. The ratings agency projects industry revenue to grow at a compound annual growth rate (CAGR) of around 24% between fiscal years 26 and 30, with stable EBITDA margins of approximately 40-42%.Key Drivers of Growth
Digitization, cost competitiveness, and the rising adoption of artificial intelligence are identified as key drivers fueling strong growth in India’s data center sector. Long-term contractual arrangements with customers are contributing to stable cash flows and high customer retention.Expert Insights
“The industry is experiencing a period of strong growth, with high capex, the fundraising capability of strong sponsors, and large equity investments targeted at Indian data center entities,” stated Puja Jalan, Director of CareEdge Ratings. She highlighted that AI-led demand will accelerate growth, while robust power infrastructure support is crucial to realize the industry’s potential. Managing cash flows amidst rising costs and escalating commissioning timelines will also be vital for sustained growth.Cost and Timeline Challenges
Recent years have seen data center costs increase by 50-70% due to factors including higher land prices, the adoption of advanced cooling technology, and investment in renewable energy. Commissioning timelines have also been extended due to scope changes and delays in obtaining necessary clearances.| Data Center Metric | FY22-FY25 | FY26-FY30 (Projected) |
|---|---|---|
| Co-location Capacity (GW) | 1.2 | Projected Increase |
| CAGR Revenue Growth (FY26-FY30) | ~24% | ~24% |
| EBITDA Margin | 40-42% | 40-42% |
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