India’s rapid digital transformation is driving strong demand for computing power, data storage and high-speed connectivity. Data centres are increasingly powering digital payments, online banking, e-Governance, cloud computing and Artificial Intelligence (AI).
Data centres combine servers, storage, networking, power, cooling and cybersecurity systems to ensure digital services operate continuously.
The National Informatics Centre has established National Data Centres in Delhi, Pune, Hyderabad and Bhubaneswar, along with 37 smaller facilities at State Capitals.
India’s commercial data-centre capacity has grown from around 375 MW in 2020 to 1.57 GW in August 2026 and is projected to reach nearly 8 GW by 2030. Nearly USD 70 billion in investments are underway, with another USD 90 billion in announced projects.
he Government granted data centres infrastructure status through the Harmonized List of Infrastructure in Budget 2022–23. This improves access to credit and long-term financing.
Budget 2026–27 also introduced a tax holiday for eligible foreign cloud service providers until 2047, supporting India’s attractiveness as a destination for cloud and data-centre investment.
India’s expanding AI and semiconductor ecosystems are creating additional demand for high-performance computing and data processing.
Semicon 2.0 has an outlay of ₹1,27,500 crore, while the IndiaAI Mission has a budget of ₹10,371.92 crore. The Electronics Components Manufacturing Scheme allocation has also increased to ₹40,000 crore.
Data centres operate continuously and therefore require reliable electricity. The Central Electricity Authority estimates that electricity demand from data centres could reach 17 GW by 2031–32.
India is promoting cleaner power through the Green Energy Open Access Rules, Green Energy Corridor, National Green Hydrogen Mission and solar-energy programmes.
The SHANTI Act could also support reliable nuclear power for energy-intensive sectors such as AI and data centres, including potential future Small Modular Reactors and Micro Nuclear Reactors.
Focus on Energy and Water Efficiency
As the sector expands, efficient resource use is becoming increasingly important. BIS standards cover Power Usage Effectiveness, Carbon Usage Effectiveness, Cooling Efficiency Ratio and Water Usage Effectiveness.
Advanced cooling technologies such as direct-to-chip liquid cooling, adiabatic cooling and immersion cooling are also gaining importance as AI workloads increase.
