AI Infrastructure Could Become India’s Next Trillion-Dollar Growth Story: Vinish Bawa, PwC India
Artificial Intelligence is triggering one of the largest infrastructure buildouts in modern history.
As AI workloads become increasingly compute-intensive, they are fundamentally reshaping how data is stored, processed, and moved across the digital economy. Data centres, once viewed primarily as back-end infrastructure, are rapidly emerging as strategic assets underpinning cloud computing, AI innovation, digital services, and national competitiveness.
India is uniquely positioned to benefit from this shift. According to PwC India, India’s installed data centre capacity is expected to grow from approximately 1.6 GW today to nearly 13.8 GW by 2035, supported by an estimated $71.6 billion in investments.
In this conversation with Express Computer, Vinish Bawa, Partner and Telecom Sector Leader, PwC India, and Global Data Centres Practice Leader, discusses India’s AI infrastructure opportunity, the rise of data centres, emerging investment hotspots, and what it will take for India to become a global digital infrastructure hub.
Edited excerpts:
What is the size of investment that India’s data centre market is attracting? How large could this opportunity become over the next decade?
India’s data centre market is already attracting more than $70 billion in committed and pipeline investments, signalling a decisive scale-up in digital infrastructure.
The opportunity is substantial. India’s installed data centre capacity has grown from around 520 MW in 2020 to approximately 1.6 GW today, and we expect it to expand nearly 8.5 times to about 13.8 GW by 2035. Our estimates indicate cumulative investments of roughly $71.6 billion over this period.
Several powerful demand drivers are converging simultaneously. India already has more than 1 billion internet users, around 700 million smartphone users, and nearly 500 million 5G smartphone users. Interestingly, data consumption in Tier-2 cities is now approximately 35 GB per user per month—around 30% higher than metro markets—highlighting how digital adoption is deepening beyond India’s largest urban centres. The average Indian also spends roughly 7.3 hours a day on a smartphone.
The scale of investor interest is already visible through multiple large commitments, including proposed multi-billion-dollar AI ecosystem and hyperscale data centre investments.
Whether India emerges as a global digital infrastructure hub will ultimately depend on reliable and cost-competitive power, faster land acquisition and approvals, robust connectivity, and long-term policy stability. Execution speed will be a critical differentiator.
Beyond data centres themselves, where does India stand in the broader AI value chain?
The conversation should not be limited to data centres alone. The larger question is whether India can capture value across the entire AI ecosystem—from infrastructure and compute to applications and services.
India’s strongest position today lies in AI applications, digital services, engineering talent, and the rapidly expanding Global Capability Centre ecosystem. We already have a strong foundation in building, deploying, and scaling technology solutions globally.
The biggest gaps remain in semiconductors, advanced hardware manufacturing, and high-performance compute infrastructure.
The near-term opportunity lies in accelerating AI-led solutions across industries such as financial services, healthcare, manufacturing, and public services. India’s public cloud market alone is projected to reach approximately $17.8 billion, while the AI-led data centre opportunity is estimated at $17-22 billion over the coming years.
Over time, India will need to strengthen its position further upstream in chips, compute, and infrastructure ecosystems if it wants to capture a larger share of AI-driven economic value.
AI data centres create demand far beyond the facilities themselves. Which adjacent sectors stand to benefit the most?
This is perhaps one of the most exciting aspects of the opportunity.
Data centres are often viewed as real estate or infrastructure assets, but their economic impact is far broader. Our analysis suggests that beyond core data centre operations, India could generate a cumulative ecosystem opportunity of nearly $280 billion by 2035.
Power and renewable energy will likely emerge as the biggest beneficiaries because AI workloads are extremely energy-intensive. Cooling and thermal management technologies, telecom and fibre infrastructure, engineering services, construction, and electrical equipment will also see significant demand growth.
Most importantly, servers, chips, storage systems, and networking infrastructure alone are expected to account for 65-75% of total data centre capital expenditure, representing an opportunity of roughly $180-210 billion.
The most attractive investment opportunities will sit at the intersection of energy, sustainability, and digital infrastructure.
Cooling is rapidly becoming a strategic issue for AI infrastructure. How do you see cooling technologies evolving?
Cooling is moving from an operational requirement to a strategic design consideration.
Historically, enterprise workloads operated at relatively modest rack densities. However, AI workloads are dramatically changing the equation. Rack densities that once averaged below 12 kW are now moving beyond 70 kW and increasingly exceeding 150 kW in advanced AI environments.
At those levels, traditional air-cooling technologies become significantly less efficient.
Today, technologies such as direct liquid-to-chip cooling and rear-door heat exchangers remain in the early stages of adoption, largely limited to select high-density deployments.
Over the next three to five years, we expect liquid-based and immersion cooling technologies to scale much more broadly across AI-focused facilities. The need to improve energy efficiency, manage operating costs, and meet sustainability targets will make cooling innovation a central component of next-generation data centre design.
Several countries are competing aggressively for AI and data centre investments. What advantages does India possess?
India has several structural advantages.
First, we have one of the world’s largest digital economies and one of the strongest technology talent pools globally. Second, demand for AI, cloud, and digital services continues to accelerate. Third, India remains one of the most cost-competitive markets for data centre development.
Data centre capital expenditure in India is estimated at roughly $4.7-6.5 million per MW, making it one of the lowest-cost markets in Asia and second only to China among major regional markets.
However, there is still room for improvement.
Compared to Singapore and the UAE, we need to improve infrastructure readiness, project execution speed, and approval timelines. Relative to China, we need greater manufacturing depth, especially in semiconductors and advanced hardware ecosystems.
Policy support around renewable energy, ease of doing business, domestic manufacturing, and digital infrastructure development will be critical to attracting long-term global capital.
As states and private players compete for investments, what will determine future winners?
Leadership will ultimately be defined by execution. The companies and regions that can secure long-term, cost-efficient power, build infrastructure at scale with speed and reliability, and establish strong sustainability credentials will emerge as leaders.
Strong partnerships with hyperscalers will also be a major differentiator.
From a regional perspective, markets that combine renewable power availability, robust fibre connectivity, proactive state policies, and ready-to-develop land banks are likely to attract disproportionate investment.
The ability to seamlessly integrate infrastructure, energy, and digital ecosystems will determine which companies and regions lead India’s AI infrastructure landscape.
Is India witnessing a once-in-a-generation infrastructure opportunity?
Absolutely. AI is not simply increasing demand for data centres; it is fundamentally reshaping where compute sits, how data moves, how networks are built, and ultimately who captures value across the digital economy.
We believe AI infrastructure represents a once-in-a-generation opportunity comparable to the role that highways, railways, ports, and power grids played in earlier economic cycles.
Data centres, cloud platforms, and AI ecosystems are becoming foundational to economic growth, productivity, innovation, and competitiveness. If India executes well through the right combination of policy support, infrastructure investments, and ecosystem development, this opportunity could underpin one of the country’s next trillion-dollar growth stories.
The strategic choices made today—in policy, investment, infrastructure, and execution—will determine how much of that value India ultimately captures.
