India’s data centre industry is entering a major expansion phase, with installed capacity expected to rise more than fourfold by 2030, according to a report by Rubix Data Sciences.
The country’s installed data centre capacity is projected to grow from 1.5 GW in 2025 to 6.5 GW by 2030. The sector added 387 MW of IT capacity in 2025, more than twice the 191 MW added in 2024, highlighting the rapid pace of infrastructure development.
Cloud Computing and AI Drive Data Centre Growth
India had 271 data centres as of January 2026, with Mumbai, Hyderabad, Delhi NCR, Bengaluru and Chennai accounting for nearly 65 per cent of the country’s total facilities. In June 2025, India ranked seventh globally by the number of data centre facilities.
The growth is being fuelled by rising demand for cloud computing, AI workloads and digital services. The wider adoption of 5G, e-commerce, UPI and OTT platforms is also increasing the need for local data storage and processing capacity.
India’s relatively lower construction costs are another factor supporting the sector’s expansion. According to the Rubix report, building data centres in India can cost around 30–40 per cent less than in China and the US.
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The investment pipeline is also growing rapidly. Commitments from Amazon Web Services, Microsoft and Google alone total around $67.5 billion, while the overall data centre investment pipeline in India stands at approximately $90 billion. This is nearly six times the $13–15 billion invested in the sector between 2020 and 2024.
The Centre has also estimated that India’s AI-driven digital infrastructure, including data centres, could catalyse investments of up to ₹4,200 billion in the years ahead.
Data Centre Boom Could Put Pressure on Water and Power
The rapid build-out of data centre infrastructure is also raising concerns over the availability of water and electricity.
Data centres in India currently consume around 150 billion litres of water each year. That figure could rise to nearly 359 billion litres by 2030, according to the report. More than half of the country’s data centre facilities are located in regions already facing water stress, adding to concerns around the long-term sustainability of the sector’s expansion.
Power demand is expected to rise sharply as well. According to the Ministry of Power, electricity consumption from data centres could increase more than 13-fold, from around 1 GW currently to 13.56 GW by 2031–32.
At the same time, data centre operators are under growing pressure to reduce emissions and shift towards cleaner energy sources as India works towards its 2070 net-zero target.
India’s Next Challenge Is Scaling Execution
Despite generating nearly 20 per cent of the world’s data, India currently accounts for only around 3–4 per cent of global data centre capacity. This gap points to significant room for further expansion as demand for digital infrastructure continues to grow.
The Rubix Data Sciences report said India is well placed to become a major global hub for hyperscale and colocation data centres, supported by continued investment from hyperscalers, favourable government policies and the country’s expanding renewable energy base. However, the next phase will depend on how effectively the industry can turn its large investment pipeline into operational capacity.
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“India’s data centre industry has moved past its early growth phase and is now in the middle of a large-scale, AI-driven investment cycle, with the current pipeline significantly outpacing historical investments,” said Tushar Bhaskar, President, Rubix Data Sciences. “As demand from hyperscalers, AI workloads, and digital enterprises accelerates, the next test for the industry will be execution.”
Indrani Priyadarshini is a journalist and editorial professional specialising in technology, artificial intelligence, smart cities, green energy, and digital transformation. With over four years of experience in tech journalism and digital media, she is known for turning complex industry developments into clear, engaging, and insightful stories. Her expertise spans reporting, editorial strategy, digital publishing workflows, and in-depth coverage of emerging technologies shaping the future.
