India is set to increase its data centre capacity fivefold to about 7.5 gigawatts by March 2030, according to a Crisil Ratings report released on Tuesday.
The expansion is driven by generative artificial intelligence, enterprise digitalisation and growing data consumption. Crisil expects investments of more than Rs 3 lakh crore over the next four financial years.
Nearly half of the new capacity is already pledged under long‑term contracts, which Crisil says reduces speculative development and off‑take risk. Early agreements with hyperscalers, prompted by cloud adoption and compute‑intensive GenAI workloads, provide revenue certainty and help de‑risk projects despite the accelerated build‑out.
Strong demand from global hyperscalers is also supporting investment decisions. India’s cost advantage – development costs about 20% lower than in many Asia‑Pacific markets – combined with lower power tariffs, allows rental rates 30‑35% below peer markets. Large campuses powered by renewable energy further enhance the country’s appeal to hyperscalers seeking to meet sustainability goals.
Geographic Concentration and Power Challenges
Crisil notes that about three‑quarters of the projected 6 GW of new capacity will be concentrated in Visakhapatnam, Mumbai and Hyderabad. By fiscal 2030, data centre capacity in these cities could represent roughly 80%, 60% and 20% of their current peak electricity demand, respectively.
The concentration places pressure on power infrastructure, making timely grid connectivity and transmission upgrades critical for project execution.
Outlook
While the surge in capacity promises to transform India’s digital infrastructure, the industry’s ability to deliver sustainable returns will hinge on regulatory clearances, disciplined execution and reliable power supply.
Why it matters: The massive build‑out will shape India’s digital economy, attract global tech investors and influence regional energy demand, affecting power markets and sustainability targets across the Middle East and Egypt, where similar data centre expansions are under consideration.