India’s Data Centre Capacity Quadruples to 1.7 GW, Driven by AI and Cloud Demand

India is now a major data-center market after its live IT capacity quadrupled over the past six years to 1.7GW. The country has a strong pipeline with 1.3GW under construction and another 3.2GW of projects that have secured the land, power and permits needed for construction. Strong scores on energy availability and fiber connectivity make India a preferred destination for building data centers in Asia-Pacific.

Maharashtra remains India’s dominant data centre market. It has the largest live IT base, accounting for 55 percent of the total capacity in the country. It also has the largest pipeline of projects which have received necessary approvals to start construction. Maharashtra combines compute demand from enterprise customers with the data-center infrastructure needed to serve it, including cloud regions (clustered data centers), subsea cable connectivity and an established developer ecosystem. The states of Andhra Pradesh, Gujarat, Karnataka, Tamil Nadu, Telangana and Uttar Pradesh will play critical roles in the next phase of growth as companies announce large investment and projects in these states.

Domestic conglomerates Adani and Reliance have committed USD 210 billion to data-centre development in India, accounting for 45 percent of total announced investment. Global hyperscalers Google, Amazon and Microsoft are the next-largest investor group, with USD 84 billion announced. About 95 percent of all announced investment is targeting large hyperscale AI campuses.

BloombergNEF expects India’s data-centre electricity demand to grow more than eightfold to 91 terawatt-hours in 2035 from 11 terawatt-hours in 2025. Power usage will pick up as under-construction hyperscale capacities come online in the next 3-10 years. Many hyperscalers have net-zero targets for 2030, so their use of renewable electricity is also expected to rise. India’s installed electricity generation capacity has grown at a 7.1 percent compound annual rate since 2021 to keep up with rising demand. However, slower transmission network build-up had delayed the commissioning of some power generation projects in the past. And without careful planning it may affect the development of large data centers as well.

Most Indian data centres use air to cool their servers and air-based systems to remove the heat. Water is not an immediate constraint. But in water-stressed cities such as Chennai and Bengaluru, data centres using cooling systems that consume large amounts of water could add pressure to local water supplies.