According to a report by Jefferies, India’s data centre industry is projected to expand rapidly, with total capacity expected to rise five times to 8GW by 2030. The surge will be driven by rising data traffic, growing use of artificial intelligence (AI), increasing demand for low-latency services, and regulatory support for data localisation. Setting up 1MW of data centre capacity in India requires $4-5 million in capital expenditure, meaning the incremental 6.4GW capacity needed by 2030 will require around $30 billion in investment. Leasing revenues are projected to grow fivefold to $8 billion by the same year.
Further, the report mentioned that data traffic in India has increased 30-fold since 2016-17, fuelled by higher internet penetration, smartphone adoption, and the popularity of over-the-top (OTT) platforms, digital payments, and e-commerce. Regulatory moves such as the Digital Personal Data Protection (DPDP) Act, 2023, and Reserve Bank of India (RBI) guidelines on data localisation have further strengthened demand.
The report stated that AI adoption will also be a key driver. AI servers consume five to six times more power than non-AI servers and require liquid cooling, which raises demand for advanced infrastructure. Currently, hyperscale cloud service providers account for 60 per cent of data centre clients, while banks contribute about 17 per cent.
Meanwhile, India’s colocation capacity has already grown fivefold to 1.7GW, with occupancy levels at 97 per cent, reflecting demand outpacing supply. The report noted that this expansion will create downstream opportunities across sectors: $6 billion for real estate, $10 billion for electrical and power systems, $7 billion for racks and fitouts, $4 billion for cooling systems, and $1 billion for network infrastructure.
Given the scale of investment required, the report stressed that access to capital will be critical for companies looking to expand in this fast-growing sector.
