Girish Bhatia, Head of Solutions Engineering, Ciena India
India stands on the cusp of a massive digital revolution and connectivity lies at its core as a critical enabler. The telecom sector, which generated revenue of around Rs 33.6 billion in financial year 2023-24, is helping to fuel India’s growing digital economy. It not only connects people and devices but also acts as a catalyst for economic growth across various industries.
Improved and reliable connectivity can significantly expand revenue opportunities for companies across different industry verticals. Around 95.5 per cent of the Indian villages now have access to the internet, enabling enterprises in smaller towns and cities to easily access both national and international markets.
India’s booming data centre and cloud market
One of the most transformative developments driven by connectivity is the rise of data centres. As Indian businesses undergo digital transformation and the country’s banking, healthcare and public services are increasingly becoming digitalised, demand for local data storage and real-time processing is surging. This has led to a wave of investments in hyperscale and edge data centres across the country. Between 2019 and 2024, India’s data centre sector attracted investments of $60 billion.
The growing popularity of artificial intelligence (AI) tools and applications will lead to an increase in data centres. Globally, around 43 per cent of new data centre facilities are likely to be dedicated to AI workloads, as per the recent Ciena survey of over 1,300 data centre decision-makers across the globe. In India, the trend is similar, with 45.54 per cent of survey respondents believing that 25 to 50 per cent of new data centres will be dedicated to AI workloads. Furthermore, approximately 58 per cent of Indian respondents believe AI and machine learning workloads will likely strain DCI (data centre interconnect) network infrastructure the most over the next two to three years.
Additionally, AI is expected to significantly increase network traffic, which will require data centre operators to re-evaluate their existing network architecture so that they can accommodate the growing demands. The growth of local data centres not only generates demand for cloud engineering, cybersecurity and AI services but also provides a platform for the Indian IT and software services to expand their global footprint, potentially leading to an increased investment in the country and its workforce.
Sustaining India’s IT advantage
India’s software and IT services sector already contributes significantly to gross domestic product (GDP) and foreign exchange earnings. To sustain and grow this advantage, digital infrastructure must keep pace. Seamless connectivity, robust data centres and reliable power are essential if India is to continue serving global clients and build next-generation digital offerings from within.
One area where this becomes even more critical is in the race to lead in AI. India has launched several initiatives to boost its profile in AI, including building large language models (LLMs). For the country to realise its AI vision, India needs the foundation of a world-class digital infrastructure, including dense fibre networks, high speed internet and distributed compute capacity housed in efficient, secure data centres.
Fintech services will thrive with greater network connectivity
A direct outcome of an improved telecom infrastructure is the wider adoption of digital financial services. India’s Unified Payments Interface (UPI) has already revolutionised payments with transactions touching a record Rs 24.77 trillion in March 2025, according to the National Payments Corporation of India. Improved connectivity in semi-urban and rural areas can further drive UPI usage and increase revenue for the fintech sector.
Another area that stands to benefit is insurance. For instance, claim processing can be radically simplified with digital tools. High speed connectivity enables on-site image uploads, real-time verification and faster approvals, eliminating the need for physical inspections. This level of convenience not only improves customer satisfaction but also broadens the insurance market to previously underserved segments.
Powering global investment
India’s growing digital economy is increasingly attracting foreign direct investment. Infrastructure improvements designed to maintain and grow network capacity are key to maintaining this momentum. Investments in subsea cables connecting India to the global internet backbone can scale further. Domestic network build-outs to ensure last-mile connectivity in rural and remote parts of the country should be prioritised.
While India’s scale and complexity are unique, the road map is clear – prioritise the building of state-of-the-art telecom infrastructure, streamline regulations and promote public-private partnerships to build capacity swiftly.
India is on the road to new levels of digital transformation success, with service providers, regulators and the broader telecom industry coming together to contribute to the country’s $5 trillion economy. By prioritising robust connectivity, data centre development and a forward-thinking regulatory environment, India can not only solidify its position as a global leader in IT and AI but also unlock unprecedented economic opportunities for all.
