Decoding India's Digital Surge: Data Centre Market Projected to Hit $22 Billion by 2030

India’s Data Centre Sector Set for Massive Surge, Projected to Reach $22 Billion by 2030​

India is rapidly emerging as a major data centre hub in the Asia-Pacific region. The country's data infrastructure market is on the verge of exponential growth, with valuations expected to more than double over the next decade. A recent industry report highlights the strong investment confidence and the immense potential driving the sector's transformation.

The market, currently valued at approximately $10 billion in 2025, is projected to soar to $22 billion by 2030. This dramatic escalation underscores the accelerating pace of digital transformation across nearly every industry in the country.

Trajectory of Investments and Capacity Expansion​

The growth trajectory is underpinned by massive planned capacity additions and robust investment flows. Installed data centre capacity is expected to reach 1.7–2.0 GW by the end of 2026. Furthermore, the industry anticipates this capacity could climb to 4-5 GW by 2030.

This expansion is backed by significant financial commitments, with nearly $30 billion in investments anticipated. Historically, between 2020 and 2024, the sector successfully attracted approximately $13–15 billion in investments. Notably, foreign institutional investors constituted nearly 80 per cent of these total capital inflows.

Looking ahead, the investment pipeline remains exceptionally strong. Announced projects are pegged at $60–70 billion over the next five years, largely fueled by joint ventures and hyperscale platform developers.

Policy Tailwinds Fueling Global Data Hub Status​

Industry experts attribute India’s readiness to become a global data centre and AI hub to strong governmental support. Shrinivas Rao, FRICS, CEO of Vestian, noted that the sector is rapidly transforming due to robust policy backing and escalating digital demand.

The government's strategic incentives are pivotal to this growth. These include single-window clearances, 20-year tax exemptions, GST benefits, and incentives that extend all the way to 2047. This framework positions India to capitalize on the increasing demand for data infrastructure.

Competitive Advantage and Market Dynamics​

Beyond policy, India offers a critical competitive cost advantage. Data centre construction costs are estimated at $6–7 million per MW. This is significantly lower compared to mature APAC markets such as Japan and Singapore. This cost efficiency enhances the nation's appeal for large-scale global investments.

The foundation of this growth lies in the country’s accelerating digital economy and expanding internet user base. Hyperscale operators are increasingly viewing India as a prime destination for developing essential digital infrastructure.

Key Metropolitan Hubs Driving Infrastructure Growth​

While data centre infrastructure is currently concentrated in select metropolitan areas, multiple hubs are driving the growth narrative. Mumbai continues to stand as the country’s largest data centre hub, benefiting from strong global connectivity and established infrastructure.

Chennai is recognized as a key global data gateway due to its multiple submarine cable landings, ensuring high-capacity, low-latency connectivity. Meanwhile, Hyderabad, Bengaluru, and Pune are establishing themselves as crucial secondary hubs. Their emergence is fueled by robust IT ecosystems, abundant land availability, and competitive operational costs.

Furthermore, cities such as Kochi, Jaipur, Visakhapatnam, and Ahmedabad are gaining significant traction. This is attributed to competitive land availability, supportive state policies, and growing enterprise demand across these markets. Operational capacity in these secondary markets is currently estimated at 60–80 MW, and is projected to surpass 100 MW by the end of 2026.