India's data centre capacity is projected to increase significantly by 2030, potentially reaching between 3 and 3.6 gigawatts (GW), driven primarily by hyperscalers and emerging artificial intelligence (AI)-focused cloud providers, according to a recent industry assessment cited by Axis Capital. However, challenges related to execution and supply-chain constraints may prevent the sector from achieving the more ambitious public targets of 6 to 8 GW set by some industry participants.

Currently, India’s installed data centre capacity stands at approximately 1.3 to 1.4 GW. The bulk of this capacity—around 60 to 65 percent—is held by third-party colocation facilities, which lease infrastructure to multiple clients. Hyperscaler captive or leased capacity comprises roughly 25 to 30 percent, while enterprise data centres and edge facilities make up about 8 to 10 percent and 2 to 3 percent, respectively.

Hyperscalers, including Amazon Web Services, Microsoft, and Google, are expected to dominate future demand, potentially accounting for as much as 90 percent of data centre needs by 2030, up from the current 60 percent share. This growth is attributed to these companies expanding their data centre footprints within the country, as well as to increased demand from neo-cloud providers and hosting requirements associated with large language models and AI applications.

In contrast, demand from enterprise users is anticipated to remain relatively stable in absolute terms over the coming years. The expansion of hyperscalers and AI-focused cloud players is seen as the primary catalyst for the sector’s growth, reflecting broader trends in digital transformation and the increasing adoption of cloud services across India.

While the projected capacities indicate robust growth in the data centre market, industry experts caution that supply-chain disruptions, regulatory hurdles, and complexities in infrastructure deployment may constrain the pace at which these capacity goals can be realized. These factors could result in operational capacities falling short of publicly announced targets.

Overall, India’s data centre industry is poised for significant expansion, underpinned by the increasing presence of global hyperscalers and the growing importance of AI-driven cloud computing in the country’s digital ecosystem.