How Are Colocation and Cloud Services Shaping India's $1 Trillion Digital Economy?
Click to start listening
Synopsis
Discover how colocation and cloud services are critical to India's vision of a $1 trillion digital economy. This report highlights the staggering growth potential and the pivotal role of infrastructure in shaping India's digital landscape.
Key Takeaways
- India's digital economy is set to reach $1,460 billion by FY30.
- Colocation and cloud services provide essential infrastructure for growth.
- Demand for data centers is exceeding supply, highlighting a significant opportunity.
- Investments in hardware infrastructure will be vital for supporting digital initiatives.
- Major players like Adani and Nxtra are leading the market expansion.
New Delhi, Sep 29 (NationPress) The colocation and cloud services sector in India is forming the key foundation of the country's ambitious $1 trillion digital economy mission, according to a report released on Monday.
The infrastructure of data centers and cloud platforms is crucial for supporting India’s rapidly expanding digital economy, which is projected to reach $1,460 billion by the Financial Year 2030 (FY30).
Furthermore, colocation and cloud services provide a secure and scalable infrastructure that powers the digital growth of enterprises, hyperscalers, and government entities, as highlighted by Equirus Capital, a comprehensive investment banking firm.
The fundamental components of the $1 trillion digital economy will rely on hardware infrastructure, with an emphasis on semiconductors and electronics manufacturing, along with the data center and hyperscaler layer that focuses on both physical and cloud infrastructure.
Moreover, the foundational model layer will prioritize AI model development, while the application layer will emphasize the real-world implementation of AI, both of which will be vital to progress.
The report states that India is gearing up for a substantial expansion in data center capacity driven by significant investments, yet the demand is projected to exceed supply.
Capital expenditures (capex) are anticipated to increase from Rs 175 billion to Rs 575 billion, marking a 23 percent Compounded Annual Growth Rate (CAGR) from 2024 to 2030.
Despite the surge in data centers, demand continues to outstrip supply.
Over the past year, supply has risen from 75 megawatts (MW) to 114 MW, nearly a 50 percent increase, while demand has escalated from 81 MW to 122 MW, representing an increase of over 50 percent, according to the report.
Key growth drivers in India’s data center and cloud computing landscape include the surge in data consumption, widespread enterprise cloud adoption, favorable policy and regulatory frameworks, along with AI and emerging technology workloads.
Industry leaders such as Adani, Nxtra, and Sify are expected to play pivotal roles in the data center sector.
"An addition of over 1.6GW of capacity is projected on top of the existing 1.3GW, with Adani Connex, Nxtra, and Yotta collectively contributing approximately 860MW in capacity," the report concluded.
Point of View
It is essential to recognize that India's digital transformation is not just a trend, but a pivotal movement towards modernization and global competitiveness. The growth in colocation and cloud services is a testament to the nation's commitment to embracing technology and innovation, ensuring that we remain aligned with global standards while fostering local talent and infrastructure.
NationPress
29/09/2025
Frequently Asked Questions
What is the projected growth of India's digital economy?
India's digital economy is projected to reach $1,460 billion by FY30.
What are the primary drivers of growth in data centers?
Key drivers include increased data consumption, enterprise cloud adoption, favorable policies, and AI workloads.
Who are the leading players in the data center market?
Major players include Adani, Nxtra, and Sify.
What is the expected capital expenditure growth from 2024 to 2030?
Capex is expected to grow from Rs 175 billion to Rs 575 billion, a CAGR of 23 percent.
Why is there a demand-supply gap in data centers?
The demand for data centers is outpacing supply due to rapid digital growth and increased data usage.
