India has overtaken all Asia-Pacific rivals outside China to become the region's leading data centre market, after its live IT capacity quadrupled over the past six years to 1.7 gigawatts (GW), according to a report released on Friday, 21 August 2025 by BloombergNEF (Bloomberg New Energy Finance). The country now holds a construction pipeline of 1.3 GW and a further 3.2 GW of projects that have already secured land, power, and permits.

Why India Has Pulled Ahead

The BloombergNEF report attributes India's rise to two structural strengths: robust energy availability and dense fibre connectivity. “Strong scores on energy availability and fibre connectivity make India a preferred destination for building data centres in Asia-Pacific,” the report noted. These factors have made the country attractive to both domestic conglomerates and global technology giants looking to anchor their next generation of AI infrastructure in the region.

Maharashtra Leads, Six States Set for Next Wave

Maharashtra remains India's dominant data centre hub, accounting for 55 per cent of the country's total live IT capacity and holding the largest pipeline of projects awaiting construction. However, the report identifies Andhra Pradesh, Gujarat, Karnataka, Tamil Nadu, Telangana, and Uttar Pradesh as critical growth corridors in the next phase, as companies announce large-scale investments across these states.

Investment Picture: Domestic Giants and Global Hyperscalers

Domestic conglomerates have committed $210 billion to data centre development in India, representing 45 per cent of total announced investment. Global hyperscalers — Google, Amazon, and Microsoft — form the next-largest investor group, with a combined $84 billion announced. Notably, approximately 95 per cent of all announced investment is targeting large hyperscale AI campuses, underscoring the degree to which artificial intelligence is driving this infrastructure boom.

Power Demand Set to Surge Eightfold by 2035

BloombergNEF projects India's data centre electricity demand will grow more than eightfold — from 11 terawatt-hours (TWh) in 2025 to 91 TWh by 2035 — as under-construction hyperscale facilities come online over the next three to ten years. The report adds that many hyperscalers carry net-zero targets for 2030, meaning their reliance on renewable electricity is also expected to climb sharply. India's installed electricity generation capacity has already been growing at a 7.1 per cent compound annual rate since 2021 to keep pace with rising demand.

What This Means for India's Digital Economy

This is not a single-quarter data point — it reflects a structural shift in where the world's digital backbone is being built. With nearly 5 GW of capacity either live or in the pipeline, India is positioning itself as a genuine alternative to established APAC hubs. The scale of AI campus investment signals that the next competitive frontier is not just cloud storage but the compute infrastructure underpinning large language models and enterprise AI. How India manages the associated power and water demands will determine whether this momentum is sustained.