Will India's Data Centre Capacity Surge to 14 Gigawatts by 2035?
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Synopsis
India's data centre capacity is set for remarkable growth, projected to reach 14 gigawatts by 2035. With a staggering annual growth rate of 20-24 percent, this expansion signifies the booming digital economy's central role in India's future. What implications will this have for businesses and consumers alike?
Key Takeaways
- India's data centre capacity is projected to grow significantly by 2035.
- The anticipated annual growth rate is between 20-24 percent.
- The digital economy is expected to contribute 20 percent of India's national income by 2029-30.
- Proximity to customers and reliable infrastructure are key factors for data centre locations.
- Investment from global and domestic players is driving this expansion.
New Delhi, Dec 23 (NationPress) The installed capacity of data centres in India is anticipated to escalate from approximately 1.5 gigawatts at present to an impressive 14 gigawatts by the year 2035. This growth is expected to occur at an annual rate between 20-24 percent, according to a recent report released on Tuesday.
The expansion within the data centre sector reflects the growth of the digital economy, which currently contributes $402 billion or 11.74 percent of the GDP for the fiscal year 2022-23. Projections suggest it will represent around 20 percent of national income, outpacing agriculture and manufacturing by the fiscal year 2029-30, as indicated in the PwC India report.
Data centres are fundamental to India's digital economy, supporting a wide range of services including e-governance, fintech, media streaming, e-commerce, and advanced AI applications.
Vinish Bawa, Partner and Leader of Telecom and Data Centres at PwC India, stated, “We are witnessing a significant turning point in the data centre market of India. There is a robust ecosystem of increasing demand driven by the widespread adoption of cloud services, data localisation, and the rise of AI.”
To support the next phase of growth, it is essential to establish a stable and future-ready legislative and tax framework that addresses the considerable capital intensity and technology needs of contemporary data centres. Bawa emphasized that India has the opportunity to transform its digital scale into a sustainable global competitive advantage.
The expansion of data centres is supported by numerous investment commitments from both domestic and international operators, real estate developers, and infrastructure investors over the next decade.
Currently, a significant portion of existing capacity is concentrated in major cities such as Mumbai, Chennai, Delhi-NCR, Bengaluru, Hyderabad, Pune, and Kolkata. This concentration is primarily due to their proximity to clients, reliable power supply, undersea cable connectivity, and investments from hyperscalers.
However, tier 2 cities are rapidly emerging as key hubs for edge data centres, as noted in the report.
“The economic potential of the data economy can only be fully harnessed when data centres themselves are integrated into this economy. Both Central and State Governments have proactively developed frameworks to attract new investments by providing predictability and certainty, along with comprehensive tax guidance,” remarked Kunj Vaidya, Partner, Tax at PwC India.
Point of View
It is evident that the projected growth of India's data centre capacity is a promising sign for the nation's digital economy. This development not only highlights the increasing demand but also emphasizes the need for supportive policies to ensure sustainable growth. It is crucial for India to leverage this opportunity to solidify its position as a global digital leader.
NationPress
23/12/2025
Frequently Asked Questions
What is the current capacity of data centres in India?
Currently, India's data centre capacity stands at approximately 1.5 gigawatts.
What growth rate is expected for India's data centres?
The data centre capacity in India is projected to grow at an annual rate of 20-24 percent.
When is India's data centre capacity expected to reach 14 gigawatts?
It is anticipated that India's data centre capacity will reach 14 gigawatts by 2035.
Which cities in India have the most data centre capacity?
The majority of existing capacity is in Mumbai, Chennai, Delhi-NCR, Bengaluru, Hyderabad, Pune, and Kolkata.
Are tier 2 cities becoming important for data centres?
Yes, tier 2 cities are rapidly emerging as significant hubs for edge data centres.
