India’s share of the global data centre market is expected to rise from 2–3% in FY26 to around 5% by FY30. This growth is being driven by AI-led workloads, increased digital consumption, and cloud adoption, leading to significant capacity expansion. The market, currently valued at about $1.7 billion, is projected to reach approximately $6.8 billion by FY30, showcasing substantial growth and global significance.
The report by KPMG in India emphasizes the strong demand visibility, substantial investments, and supportive policy frameworks contributing to India’s data centre market growth. Installed capacity has already more than tripled since FY19 to nearly 1.9 gigawatts in FY26, with an additional pipeline of about 4.5 gigawatts anticipated over the next five years.
Hyperscale cloud providers, global content platforms, and AI-focused companies are increasingly propelling the market growth, shifting away from traditional enterprise and telecom-driven demand. By FY30, AI and high-performance computing workloads are expected to make up around 55% of the total capacity, indicating a significant role in shaping the sector’s future.
The industry is experiencing a shift towards high-density, AI-ready infrastructure, incorporating advanced cooling systems, higher power needs, and GPU-intensive architectures. India’s competitive edge lies in its cost-effective power, low construction expenses, and a vast pool of IT and AI talent, positioning it favorably on the global stage.
Driven by strong digital fundamentals and a burgeoning user base, including over 950 million internet users and 660 million smartphone users, India’s data centre demand is on the rise. Additionally, regulations like the Digital Personal Data Protection (DPDP) Act are expected to boost domestic data centre requirements significantly.
With investments exceeding $120 billion from hyperscalers, global operators, and Indian entities, the market demonstrates robust long-term confidence. Rohan Rao, Partner at KPMG in India, notes that the country’s data centre sector is at a turning point, with demand, capital, and technology converging to fuel extensive infrastructure development. The shift towards AI-centric workloads is reshaping data centre design, scale, and economics nationwide, positioning India as a key player in the global digital infrastructure landscape.
