India's Data Centre Market Set to Double to $22 Billion by 2030

India is emerging as a strategic data centre hub within the Asia-Pacific region, according to Vestian's latest report.

India's data centre market is expected to witness sustained expansion over the next decade as digital transformation accelerates across industries.

Installed capacity is projected to reach 1.7-2.0 GW by the end of 2026, backed by nearly $30 billion in investments. This number is further expected to go up to 4-5 GW by 2030, said the report.

The country's accelerating digital economy, expanding internet user base, and increasing investments from hyperscale operators are positioning it as a key destination for data infrastructure development.

"India's data centre sector is rapidly transforming on the back of strong policy support and rising digital demand. Despite a limited share of global capacity, India has a huge upside potential to lead in Al infrastructure," said Shrinivas Rao, FRICS, CEO, Vestian.

With single-window clearances, 20-year tax exemptions, GST benefits, and incentives extending to 2047, India is strategically positioned to emerge as a global data centre and Al hub, he mentioned.

Between 2020 and 2024, the sector attracted approximately $13-15 billion in investments, with foreign institutional investors accounting for nearly 80 per cent of the total capital inflows.

The investment pipeline remains strong, with announced projects totalling $60-70 billion over the next five years, largely driven by hyperscale platforms and joint venture developments.

India also offers a competitive cost advantage, with data centre construction costs of $6-7 million per MW, significantly lower than those in mature APAC markets such as Singapore and Japan, thereby enhancing its attractiveness for large-scale investments.

According to the report, data centre infrastructure in India remains concentrated in a few key metropolitan markets.

Mumbai remains the country's largest data centre hub, driven by strong global connectivity and infrastructure advantages. At the same time, Chennai serves as a key global data gateway, with multiple submarine cable landings that enable high-capacity, low-latency connectivity.

Meanwhile, Hyderabad, Bengaluru, and Pune are emerging as important secondary hubs owing to robust IT ecosystems, ample land availability, and competitive operating costs.

Cities such as Ahmedabad, Kochi, Jaipur, and Visakhapatnam are gaining traction due to competitive land availability, improving digital infrastructure, supportive state government policies, and growing enterprise demand.

Operational capacity in tier 2 markets is currently estimated at 60-80 MW and is expected to exceed 100 MW by the end of 2026, said the report.

- IANS