India is expected to witness a significant increase in its operational data centre capacity, projected to rise from 2.2 GW in 2025 to 12 GW by 2030, reflecting a compound annual growth rate of 40%. The surge in AI-dedicated capacity is also anticipated, with a forecasted growth from 275 MW to 6,546 MW over the same period. This expansion is primarily driven by the escalating demand from hyperscale cloud providers, enterprise digitalization, and artificial intelligence initiatives, as highlighted in a report by Wood Mackenzie.
The report underlines that India’s data centre market is transitioning into a phase of structural growth, positioning the country as one of the most appealing infrastructure investment prospects in the Asia-Pacific region. Notably, India’s digital economy, valued at Rs 32 trillion in 2025, contributes around 12% to the GDP, catering to over 1.03 billion active internet users and processing approximately 22 billion UPI transactions monthly.
Furthermore, the domestic AI market in India is expected to reach Rs 11.7 trillion by 2032, further fueling the demand for high-performance computing infrastructure. The report emphasizes that the convergence of hyperscale capital, AI workload expansion, and a decade of policy backing has created favorable conditions for India to emerge as a competitive market in the Asia-Pacific region.
According to Souhardya Pal, a Research Associate at Wood Mackenzie, the data centre market in India has evolved into a strategic investment proposition. The report also points out that reliable and cost-effective power has become a crucial factor in data centre development, surpassing land and capital as the primary constraint in the industry.
The escalating electricity demand of data centres is projected to increase significantly, with an expected 20-fold growth by 2040 from 10 TWh in 2025, constituting 7% of the total electricity demand. While Maharashtra and Tamil Nadu currently hold a substantial share of installed IT load, the report anticipates a broader investment landscape across states like Andhra Pradesh, Telangana, Uttar Pradesh, and Karnataka in the upcoming phase.
These emerging markets are witnessing substantial investments from global hyperscale players such as Amazon Web Services and Google, in addition to domestic operators like AdaniConnex, which has announced a development pipeline of 2.6 GW.
