India's data centre expansion moves beyond cloud demand

Hyperscaler investments, data localisation requirements and new computing workloads are expected to push India's data centre capacity beyond 6.7 GW by 2030, according to Anarock.

Cloud adoption is no longer the sole driver of India's data centre industry expansion. A combination of hyperscaler investments, data localisation requirements, artificial intelligence workloads and digital infrastructure demand is reshaping capacity planning, investment strategies and future development across the sector, according to a report by Anarock Capital.

The report projects India's data centre footprint to expand from 27 million square feet in the first half of 2026 to 101 million square feet by 2030. Installed capacity, which currently exceeds 1.8 GW, is expected to cross 6.7 GW by the end of the decade, supported by over $300 billion in announced investment commitments.

While cloud adoption remains an important contributor, Anarock argues that the industry's growth trajectory is being shaped by broader structural factors ranging from AI infrastructure requirements to sovereign data regulations and hyperscale investment programmes.

Data centres are becoming critical to supporting cloud computing, artificial intelligence, digital payments, e-commerce, healthcare systems and digital public infrastructure.

Anarock Capital CEO, Shobhit Agarwal, said the scale of investment commitments reflects the strategic importance of digital infrastructure in India's economy. The report estimates India's data creation is growing by over 20 per cent annually, supported by rising internet usage, digital payments, OTT consumption and government-led digital initiatives.

According to the report, India now accounts for around 18-20 per cent of global internet user growth and processes over 22.7 billion UPI transactions each month, creating sustained demand for storage, compute and connectivity infrastructure.

AI changes the economics of data centre infrastructure

One of the report's strongest themes is the growing influence of AI on future capacity requirements.

Anarock estimates that AI workloads require between 10 and 20 times the power density of traditional server infrastructure. A single Nvidia H100 GPU cluster can consume 30-60 kW per rack compared with 8-10 kW for conventional enterprise deployments.

As a result, operators are designing facilities around higher-density computing environments, advanced cooling systems and larger power allocations.

The report estimates India's pre-committed AI demand pipeline at approximately 850 MW and notes that AI-focused infrastructure can generate three to five times higher revenue per MW than traditional colocation facilities.

AI demand is also driving investments in liquid cooling technologies, battery energy storage systems, renewable energy sourcing and lower Power Usage Effectiveness (PUE) targets as operators prepare for more intensive computing workloads.

The report highlights a series of large-scale commitments from global cloud providers and Indian conglomerates. It includes Google's $15 billion AI and data centre campus in Visakhapatnam, Microsoft's $17.5 billion cloud and AI infrastructure commitment through 2029, AWS' $48 billion planned investment in Indian AI and cloud infrastructure by 2030, Adani Group's $100 billion AI-ready data centre programme and Reliance Industries' $110 billion AI infrastructure plan centred around a 3 GW campus in Jamnagar.

The report argues that the concentration of capital committed to the sector is unmatched by most emerging data centre markets, positioning India among the world's fastest-growing destinations for digital infrastructure investment.

Data localisation becomes a structural demand driver

Regulation is emerging as another major influence on future demand. According to Anarock, the Digital Personal Data Protection Act (DPDPA), 2023 has strengthened the need for domestic data infrastructure by creating legal obligations around storing and processing personal data within India across several categories.

The regulation effectively makes part of the colocation demand non-discretionary for multinational organisations operating in India, transforming demand from a business choice into a compliance requirement.

Infrastructure status granted to data centres has also improved access to long-tenure financing, while a proposed tax holiday through 2047 for eligible global cloud service providers could further enhance India's competitiveness as a digital infrastructure destination.

Expansion spreads beyond traditional hubs

Mumbai Metropolitan Region (MMR) and Chennai continue to dominate India's data centre landscape, accounting for around 62 per cent of existing capacity. However, the next phase of growth is becoming distributed.

Hyderabad and Delhi-NCR are among the largest beneficiaries of future expansion. Hyderabad's IT load capacity is projected to increase from 178 MW in H1 2026 to approximately 800 MW by 2030, supported by investments from operators including NTT Global Data Centres, CtrlS, Tillman Global Holdings and ST Telemedia Global Data Centres.

Delhi-NCR is expected to grow from 179 MW to around 550 MW by 2030, driven by projects from Yotta Infrastructure, NTT Global Data Centres, STT GDC, Sify Technologies and AdaniConneX.

Bengaluru is also emerging as a key growth market, benefiting from strong enterprise demand, GCC expansion and cloud adoption, while continuing to attract investments from NTT Data, Iron Mountain-Web Werks, Nxtra and Sify Technologies.

Digital infrastructure race shifts to power and resilience

The report argues that future competitiveness in the sector will depend on access to power rather than land alone. Data centre operators are investing heavily in renewable energy, energy-efficient cooling systems, battery storage and resilience measures as AI workloads place greater demands on physical infrastructure.

Anarock notes that power procurement has become the single most important consideration in data centre development, with operators often initiating discussions with utilities years before construction begins.

For the broader technology ecosystem, the report suggests India's next phase of digital infrastructure growth will be shaped by the convergence of hyperscaler investment, sovereign data requirements and next-generation computing workloads.

As enterprises, governments and digital platforms expand their use of cloud services, AI and data-intensive applications, data centres are moving beyond their traditional role as supporting infrastructure and becoming foundational assets in India's digital economy.