India poised for rapid data centre expansion, capacity seen reaching 12 GW by 2030

India’s operational data centre capacity is likely to rise from 2.2 GW in 2025 to 12 GW by 2030, at a compound annual growth rate (CAGR) of 40 per cent, a report said on Monday.

AI-dedicated capacity is expected to expand nearly 24-fold over the same period, rising from 275 MW to 6,546 MW, driven by demand from hyperscale cloud providers, enterprise digitalisation and artificial intelligence, the report from Wood Mackenzie said.

"India's data centre market is entering a structural growth phase that positions the country as one of Asia-Pacific's most attractive infrastructure investment opportunities," the firm noted.

India’s digital economy was valued at Rs 32 trillion in 2025, contributing approximately 12 per cent of GDP, and serves more than 1.03 billion active internet users and processes about 22 billion UPI transactions each month.

Meanwhile, India's domestic AI market is projected to reach Rs 11.7 trillion by 2032, further increasing demand for high-performance computing infrastructure.

“India's data centre market becomes a structural investment thesis. The convergence of hyperscale capital, AI workload growth and a decade of policy support have created the conditions for India to rival any market in Asia-Pacific. The question for developers and investors is no longer whether to enter India, but where and how,” said Souhardya Pal, Research Associate at Wood Mackenzie.

The report noted that reliable, cost-competitive power has become the defining factor in data centre development, overtaking land and capital as the industry's primary constraint.

Data centre electricity demand is expected to grow 20-fold by 2040 from 10 TWh in 2025 and would account for 7 per cent of the total electricity demand.

While Maharashtra and Tamil Nadu currently account for around 65 per cent of installed IT load, the firm expects the next phase of investment to also expand across Andhra Pradesh, Telangana, Uttar Pradesh and Karnataka.

These emerging markets are attracting significant commitments from global hyperscalers, including Amazon Web Services and Google, alongside domestic operators such as AdaniConnex, which has announced a development pipeline of 2.6 GW.