With artificial intelligence (AI) gaining traction, growing consumer demand for steady 5G speeds and the increasing number of smart wearables and internet of things (IoT) devices that require ultra-low latency, the pressure on digital infrastructure has increased significantly. At the same time, cloud adoption has expanded, further driving the need for data centres that can handle heavy demand. India’s data centre sector recorded strong growth in 2025, with installed co-location capacity crossing 1.5 GW, and more than 300 MW added in 2025 alone. Demand from these technologies is expected to remain strong, with the industry projected to reach 7.5-7.8 GW by 2032. Beyond that, around 6 GW is already in the committed and early-stage pipeline, which is expected to come online after 2032.
Region-wise, the Mumbai Metropolitan Region continued to lead India’s major data centre hubs. It hosted about 46 per cent of the country’s total capacity, followed by Chennai (13 per cent) and the Delhi-National Capital Region (NCR) (11 per cent). While these hubs continued to add capacity, Pune, Kolkata and Hyderabad also gained momentum. Further, 2025 was the year Visakhapatnam came into sharper focus. With rising interest and new plans from large players, the city is now expected to develop into a key data centre hub. If these plans progress as expected, Visakhapatnam’s share in India’s total capacity could rise from negligible today to more than 20 per cent by 2032.
Overall, heightened activity and capacity additions continued to power the sector in 2025. A look at the key themes that collectively reshaped India’s data centre landscape during the year…
Supportive policy and regulatory landscape
In 2025, the central policy climate became more supportive for data centres. The Ministry of Electronics and Information Technology (MeitY) restarted work on the National Data Centre Policy, 2025, and held consultations, in August 2025, on a draft aimed at simplifying approvals and supporting expansion beyond the main hubs. A key proposal is a 20-year tax holiday linked to capacity, power usage effectiveness and job creation. The policy is now nearing finalisation and is expected to be implemented in 2026.
The sector also continued to benefit from its infrastructure status announced in Union Budget 2022-23, improving access to credit and foreign investment. In parallel, the Digital Personal Data Protection Act, 2023 and its 2025 rules limited cross-border transfers to whitelisted countries, promoting local storage and processing in India.
At the state level, more than 10 states now have dedicated data centre policies, and 2025 saw these policies being used more actively to bring projects in. States such as Maharashtra, Karnataka, Tamil Nadu, Telangana, Uttar Pradesh, West Bengal and Odisha continued to offer incentives such as fiscal support, power tariff subsidies, land rebates and essential services status to attract data centre players.
Developing AI-ready facilities
In 2025, “AI-ready” emerged as a defining theme in new data centre builds. As AI needs began shaping decisions more directly, operators started launching campuses designed specifically for high-density AI and high-performance computing (HPC). Sify Technologies opened north India’s largest AI-focused centre in Noida, while STT Global Data Centres (STT GDC) launched an AI-ready campus in Kolkata with a
Rs 4.5 billion investment. These sites are built for graphics processing unit-heavy racks, higher power draw and advanced cooling. Global players also entered the market, with Equinix opening its first AI-ready data centre in Chennai in September 2025, and Digital Connexion launching an NVIDIA DGX-certified site to support AI research needs. Together, these developments indicate that AI and machine learning readiness is rapidly becoming a basic expectation for new facilities.
This shift has also extended beyond operators to equipment makers and network providers, which are adapting their products to enable faster and more standardised development of AI-ready facilities. Sterlite Technologies Limited (STL) announced a new set of data centre solutions, covering cabling and end-to-end connectivity, tailored to the growing needs of AI-driven infrastructure. The government also signed an MoU with Submer to develop an AI-focused data centre prototype, which signals support for newer cooling methods. On the equipment side, Vertiv introduced OneCore prefabricated modules for over 5 MW of high-density blocks for AI and HPC deployments. Meanwhile, MeitY is working on national standards for operating and maintaining AI-focused data centres, recognising that these facilities differ in key aspects from regular facilities.
Expanding edge infrastructure and exploring new geographic frontiers
In 2025, India’s hub-and-spoke model became clearer as operators increased their focus on edge infrastructure. Players such as Nxtra by Airtel moved beyond large metros and expanded their edge data centres across Tier II and Tier III cities. The aim is to bring content and compute closer to users, which reduces latency for services such as video streaming, gaming and industrial IoT. Several operators followed this route. CtrlS Datacenters Limited commissioned facilities in Patna and Lucknow, with plans to set up more than 20 additional centres across Tier II and Tier III markets such as GIFT City (Ahmedabad), Bhubaneswar and Guwahati. STT GDC began work on its first edge data centre in Jaipur, and AdaniConneX announced plans to set up edge data centres across the country.
This shows that growth is no longer limited to the main hubs. Operators are increasingly choosing new cities based on their own strengths and market presence. Anant Raj Limited hosts all its live data centre capacity in Haryana, while Pi Datacenters operates out of Andhra Pradesh. Within the state, Visakhapatnam stood out, attracting attention from players such as Sify-Meta, Google and Digital Connexion.
Continued investment influx
Over the past few years, the sector has remained attractive for both operators and investors. As per CBRE estimates, between 2019 and the first nine months of 2025, India secured nearly $94 billion in investment commitments from global and domestic players. In 2025, foreign involvement increased sharply, with major operators investing to set up and run their own data centres in India. A notable moment came in October 2025, when Google announced its largest-ever investment in India – a $15 billion plan to develop an AI-focused data centre hub in Visakhapatnam, Andhra Pradesh. Meanwhile, Amazon Web Services (AWS) committed to investing Rs 600 billion to expand its data centre infrastructure in the Hyderabad region. This is expected to deepen AWS’s presence in Telangana, including plans for more data centres in Hyderabad. Meta partnered with Sify Technologies on a 500 MW data centre in Andhra Pradesh, with Sify expected to invest about $1.7 billion. Microsoft has also indicated a larger pipeline, with plans to invest $17.5 billion during 2026-29 to scale its AI cloud capacity.
Indian groups and investor-backed platforms also stepped up activity. Tata Consultancy Services announced a new infrastructure subsidiary to build a 1 GW AI super data centre in India, supported by a $6.5 billion investment. Digital Connexion signed an MoU with Andhra Pradesh to invest $11 billion by 2030 in a 1 GW campus spread across 400 acres in Visakhapatnam.
Large investors and real estate partners announced fresh projects as well. The Blackstone Group and Panchshil Realty outlined a Rs 200 billion plan to develop a 500 MW hyperscale data centre in Navi Mumbai. Meanwhile, CapitaLand’s India Trust raised a $225 million data centre development fund and sold a 20 per cent stake in three under-construction projects in Mumbai, Chennai and Hyderabad to the CapitaLand India Data Centre Fund for Rs 7.02 billion.
Focus on green initiatives and sustainability
Despite these advances, power has emerged as one of the biggest challenges for the sector. A report by S&P Global projects that India’s data centres could become the Asia-Pacific region’s second-largest consumers of electricity by 2030, overtaking Japan and Australia. Electricity demand from the sector is expected to rise nearly fivefold, from 13 TWh in 2024 to 57 TWh by 2030. Therefore, it is no longer only about how fast capacity can be built, but also about how efficiently the facilities can be powered, cooled and operated, especially as rack density rises.
The government has reportedly started an exercise to map projected power demand from upcoming data centres, and the Ministry of Power has directed states to assess expected consumption in consultation with the industry. On the supply side, companies are working to address this problem. STL announced a new generation of data centre solutions, from cabling to end-to-end connectivity, designed for AI-driven data centre needs. Meanwhile, Vertiv and Caterpillar Inc. announced a strategic undertaking to collaborate on advanced energy optimisation solutions for data centres.
Preparing for the next stage of growth
The year 2025 marked the transition of India’s data centre sector into a stronger, more mature industry. Policy support improved, incentives became clearer and the industry started paying closer attention to power planning and sustainability. Growth extended beyond the main hubs, with more edge sites in smaller cities and fresh investments from telcos as well as global cloud players. At the same time, AI began to directly shape data centre planning, with new facilities being designed to meet higher power and cooling requirements.
Looking ahead, with the live data centre capacity expected to reach double-digit gigawatts, the focus is likely to be on three things: clearer policy direction under the National Data Centre Policy, faster progress on green power adoption and efficiency improvements as power and water constraints tighten, and greater consolidation as partnerships deepen. Operators may also differentiate themselves through service-led offerings such as AI cloud platforms and enhanced interconnection. Overall, 2025 did not merely add capacity – it reshaped how the sector is preparing for the next stage of growth.
Shashwat Singh
