According to a report by Equirus Capital, colocation and cloud services are emerging as the backbone of India’s $1 trillion digital economy mission. The country’s digital economy is projected to reach $1,460 billion by 2029-30, supported by rapid expansion in data centres and cloud platforms.
The report highlighted that colocation and cloud provide secure, scalable infrastructure critical for enterprises, hyperscalers, and government-led digital growth. The foundations of the $1 trillion digital economy are expected to rest on four pillars: hardware infrastructure (semiconductors and electronics manufacturing), the data centre and hyperscaler layer (physical and cloud infrastructure), the foundational model layer [artificial intelligence (AI) model development], and the application layer (real-world AI adoption).
India is poised for substantial data centre capacity expansion, with capital expenditure (capex) projected to grow from Rs 175 billion to Rs 575 billion between 2024 and 2030, reflecting a 23 per cent CAGR. Yet, despite rising supply, demand continues to outpace it.
The report mentioned that in the past year, supply increased from 75 MW to 114 MW, nearly a 50 per cent rise, while demand grew from 81 MW to 122 MW, an increase of over 50 per cent. Key factors driving this growth include surging data consumption, growing enterprise cloud adoption, supportive policies and regulations, and the increasing workloads from AI and other emerging technologies, the report said.
