India’s Data Centre Capacity Set to Reach 8 GW By 2030, Investments Near USD 160 Billion
Nearly USD 70 billion of investments are already underway in India’s data centre sector, while another USD 90 billion worth of projects have been announced, underlining the scale of planned expansion.
Data centres have emerged as critical digital infrastructure supporting online banking, e-Governance, digital payments, cloud computing and emerging technologies such as artificial intelligence. Modern facilities integrate servers, storage systems, networking equipment, power backup, cooling, physical and cybersecurity systems, and management software to ensure continuous operations.
The National Informatics Centre (NIC) has established National Data Centres at its headquarters in Delhi as well as in Pune, Hyderabad and Bhubaneswar. It has also established 37 smaller data centres across various state capitals to support government institutions and digital services.
The government has strengthened the sector through policy and fiscal measures. Data centres were included in the Harmonized List of Infrastructure under the Union Budget 2022-23, giving them infrastructure status and facilitating access to long-term credit for digital infrastructure development.
The Union Budget 2026-27 also introduced a tax holiday for eligible foreign cloud service providers until 2047 for global operations using India-based data centre infrastructure. The incentive applies to tax years from 2026-27 to 2046-47 for notified foreign companies.
Growth in data centres is also being supported by initiatives covering semiconductors, artificial intelligence and IT hardware. The second phase of the Semicon India Programme, or Semicon 2.0, has been approved with an outlay of Rs 1,27,500 crore. The IndiaAI Mission has a budget outlay of Rs 10,371.92 crore, while the allocation for the Electronics Components Manufacturing Scheme has been increased from Rs 22,000 crore to Rs 40,000 crore. The government has also launched PLI Scheme 2.0 for IT Hardware to support domestic manufacturing of products such as servers.
Energy availability and resource efficiency are emerging as key considerations as data centre capacity expands. According to the Central Electricity Authority, electricity demand from the sector could reach 17 GW by 2031-32. The government is promoting renewable and clean energy through initiatives including the Green Energy Open Access Rules, Green Energy Corridor Scheme and National Green Hydrogen Mission.
The Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Act is also expected to support the clean-power ecosystem for emerging sectors, including AI and data centres, while enabling future deployment of Small Modular Reactors and Micro Nuclear Reactors.
The Bureau of Indian Standards has developed standards covering data centre efficiency, including Power Usage Effectiveness (PUE), Carbon Usage Effectiveness (CUE), Cooling Efficiency Ratio (CER) and Water Usage Effectiveness (WUE). The Bureau of Energy Efficiency’s Energy Conservation Building Code 2017 and Energy Conservation and Sustainable Building Code 2024 also prescribe energy-efficiency and water-conservation provisions relevant to data centre infrastructure.
With AI infrastructure increasing demand for high-performance computing, data centres are also adopting advanced cooling technologies such as direct-to-chip liquid cooling, adiabatic cooling, immersion cooling and closed-loop liquid cooling systems.
The government said the expansion of India's data centre ecosystem will be important for data sovereignty, digital trust, economic competitiveness and technological self-reliance. As cloud and AI infrastructure expands, the sector will increasingly require stronger cybersecurity, responsible data practices, efficient energy and water management, and greater domestic capabilities across computing, semiconductors and other critical digital infrastructure.
Published on:
14 September 2026
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