India’s data-centre industry is entering a new phase of expansion as artificial intelligence, cloud computing and digital services drive demand for large-scale computing infrastructure. The country’s live data-centre IT capacity has quadrupled over the past six years to 1.7GW, making India the largest data-centre market in the Asia-Pacific region outside China, according to BloombergNEF.
The expansion is far from over. India has another 1.3GW of data-centre capacity under construction, while projects totaling 3.2GW have already secured the land, power and permits required to begin construction. At the same time, the growing use of AI is expected to dramatically increase electricity consumption, with data-centre power demand projected to rise more than eightfold from 11 TWh in 2025 to 91 TWh by 2035.
India’s Data-Centre Capacity Has Quadrupled
The increase from the capacity recorded six years ago to the current 1.7GW reflects the rapid development of India’s digital infrastructure.
Data centres are increasingly becoming essential infrastructure for cloud services, enterprise software, digital payments, streaming, e-commerce and AI applications. The rise of generative AI is adding another layer of demand because AI training and inference require significantly more computing power than many traditional workloads.
India’s Data-Centre Capacity Pipeline
| Data-Centre Development Stage | Capacity |
|---|---|
| Live IT capacity | 1.7GW |
| Under construction | 1.3GW |
| Projects with land, power and permits secured | 3.2GW |
| Combined live + construction + approved pipeline | 6.2GW |
If the entire identified pipeline eventually becomes operational, India’s data-centre capacity represented across these three stages would exceed 6GW. However, projects at different development stages can take several years to become operational, and the eventual build-out will depend on power availability, financing, construction timelines and customer demand.
AI Is Changing The Economics Of Data Centres
The next wave of India’s data-centre expansion is being shaped increasingly by AI. BNEF estimates that around 95% of announced data-centre investments in India are targeted at large hyperscale AI campuses.
This represents a significant change in the type of infrastructure being developed. Traditional data centres were designed largely around enterprise computing, cloud services and digital workloads. AI facilities require much greater computing density and consequently place greater demands on electricity, cooling and network infrastructure.
AI workloads can therefore change the economics of a data centre even when the physical footprint does not increase proportionately. More computing capacity can be packed into a facility, but doing so requires significantly more power and advanced cooling systems.
Investment Pipeline Highlights
| Investor / Category | Announced Investment |
|---|---|
| Adani and Reliance | $210 billion |
| Google, Amazon and Microsoft | $84 billion |
| Share of announced investment aimed at hyperscale AI campuses | About 95% |
| Adani and Reliance share of total announced investment | About 45% |
The investment figures underline the strategic importance of India’s data-centre market. Domestic conglomerates are making substantial commitments while global technology companies are also expanding their infrastructure footprints.
The concentration of capital around hyperscale AI facilities indicates that India’s data-centre build-out is increasingly being viewed as part of the country’s broader AI infrastructure strategy rather than simply an extension of conventional cloud infrastructure.
Power Demand Could Rise More Than Eightfold
The biggest implication of the expansion could be its impact on India’s electricity system.
BNEF expects data-centre electricity demand to increase from 11 TWh in 2025 to 91 TWh in 2035. That represents an increase of roughly 80 TWh over the decade and more than an eightfold rise.
| Data-Centre Power Metric | 2025 | 2035 | Change |
|---|---|---|---|
| Electricity demand | 11 TWh | 91 TWh | More than 8x |
| Additional electricity demand | — | 80 TWh | +80 TWh |
| Period covered | — | 10 years | 2025–2035 |
The increase is expected to accelerate as hyperscale facilities currently under construction become operational. BNEF expects much of the additional power requirement to emerge over the next three to 10 years.
This makes electricity availability a critical factor in determining where new data centres can be built.
Maharashtra Remains The Leading Data-Centre Hub
Maharashtra currently dominates India’s data-centre landscape, accounting for 55% of the country’s live IT capacity.
The state’s position has been supported by strong enterprise demand and established digital infrastructure. Mumbai and surrounding areas also benefit from subsea cable connectivity, cloud infrastructure and an established ecosystem of data-centre operators.
Regional Data-Centre Expansion
| Region / State | Current Significance |
|---|---|
| Maharashtra | 55% of India’s live IT capacity |
| Andhra Pradesh | Emerging major development market |
| Gujarat | New investment and project pipeline |
| Karnataka | Strong technology and enterprise demand |
| Tamil Nadu | Expanding digital infrastructure |
| Telangana | Growing data-centre investment |
| Uttar Pradesh | Emerging large-scale development market |
While Maharashtra remains the centre of gravity, the next phase of expansion is expected to become more geographically distributed as companies seek access to power, land, fibre connectivity and suitable infrastructure.
This could create new opportunities for states that can offer faster approvals, reliable electricity and access to renewable energy.
Data Centres Are Becoming A Major Power Infrastructure Challenge
India’s broader electricity system has been expanding alongside economic and digital growth. The country recorded a peak power demand of 242.49GW in FY2025-26, while total installed generation capacity had reached 509.7GW as of November 2025.
| India’s Power Infrastructure | Latest Reported Figure |
|---|---|
| FY2025-26 peak power demand | 242.49GW |
| Installed generation capacity | 509.7GW |
| Non-fossil installed capacity | 256.09GW |
| Data-centre electricity demand in 2025 | 11 TWh |
| Projected data-centre electricity demand in 2035 | 91 TWh |
The challenge is not simply generating enough electricity. Data centres need reliable, high-quality power and strong transmission infrastructure because interruptions can affect critical digital services.
BNEF has also highlighted transmission constraints as a potential bottleneck. India’s generation capacity has expanded rapidly, but delays in transmission development can prevent new power projects from being fully utilized. Similar constraints could affect data-centre projects if electricity infrastructure does not expand alongside computing capacity.
Renewable Energy Will Become More Important
The rapid increase in electricity consumption is also likely to strengthen demand for renewable power.
Global hyperscalers increasingly have net-zero commitments, creating pressure to source clean electricity for energy-intensive AI infrastructure. For Indian data-centre operators, access to renewable power could therefore become both an environmental requirement and a competitive advantage.
India’s installed non-fossil generation capacity already exceeds half of total installed capacity, according to government data. The country is also developing pumped-storage and battery-storage capacity to improve grid flexibility as renewable generation expands.
However, matching renewable generation with the continuous power requirements of data centres remains a major technical and infrastructure challenge. Data centres operate around the clock, while solar and wind generation vary according to weather and time of day.
Cooling And Water Could Become Another Constraint
Power is not the only resource that data centres consume heavily. Cooling systems are essential because high-density computing equipment generates substantial heat.
Most Indian data centres currently rely significantly on air-based cooling, which can reduce water dependence. Nevertheless, water availability could become a more important consideration as the industry expands, particularly in water-stressed urban areas.
Cities such as Chennai and Bengaluru face existing water pressures, meaning large data-centre projects may need to consider cooling technology, water recycling and local resource availability when selecting sites.
The growing importance of cooling also means that data-centre efficiency will increasingly be measured not only by computing performance but also by how efficiently facilities use electricity and other resources.
The Bigger Picture
India’s data-centre expansion is becoming a critical part of the country’s digital and AI infrastructure strategy. The jump to 1.7GW of live capacity, combined with another 4.5GW across construction and approved projects, shows that the industry has moved beyond a small number of traditional facilities toward large-scale hyperscale infrastructure.
The bigger challenge is now converting the investment pipeline into operational capacity without creating bottlenecks in electricity, transmission, cooling, water and fibre networks. AI could generate enormous demand for computing infrastructure, but the pace of growth will ultimately depend on whether India’s physical infrastructure can keep up.
Looking Ahead
The next decade could see India’s data-centre market expand several times over as AI adoption, cloud computing and digital services accelerate. With 1.3GW already under construction and 3.2GW of projects having secured key development requirements, the industry has a substantial pipeline from which to build the next generation of infrastructure. The government’s broader ambition to establish India as a global AI and technology hub is also likely to support continued investment.
However, the eightfold increase in projected electricity demand shows why the data-centre story is also an energy story. Developers will increasingly compete not just for land and customers but for reliable power, transmission capacity, renewable energy and efficient cooling. The companies and states that can solve those infrastructure requirements fastest could capture a disproportionate share of India’s next data-centre expansion cycle.
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