By Amit Sarin, Managing Director, Anant Raj Ltd
The global data centre industry is entering a new phase, marked by factors which have never been witnessed before. For years, growth in digital infrastructure was largely driven by cloud adoption, internet usage and enterprise digitisation. Today, geopolitics is emerging as one of the dominant factors beginning to influence infrastructure decisions in a significant way.
The ongoing tensions in West Asia, involving the US, Israel and Iran, have highlighted a reality that the industry can no longer ignore. Data centres are not merely technology assets. From financial systems to public services, and communications networks to increasingly, national security interests, they have become critical supporting infrastructure.
Investors today are paying closer attention to where data is stored, how it travels across borders, and whether infrastructure can withstand disruptions, as the world becomes more dependent on digital technologies.
The New Risk Equation for Data Centres
Recent events have highlighted certain drawbacks of highly connected digital networks. The Middle East has traditionally been an important link between Asia and Europe for connectivity and infrastructure.
Meanwhile, disruptions in the region have raised concerns about relying too heavily on a small number of locations, when it comes to expecting safe havens for protecting data.
As a result, hyperscalers, cloud providers and enterprises are increasingly adopting a more distributed approach to infrastructure deployment. The objective is no longer focused solely on efficiency or latency. Resilience has become equally important.
This shift is changing how companies evaluate data centre investments. Geographic diversification, multiple availability zones and cross-border redundancy are moving from best practices to business necessities.
Why Connectivity Matters More Than Ever
The conversation extends beyond physical facilities. A significant portion of global internet traffic continues to pass through submarine cable routes in strategically sensitive regions such as the Red Sea and the Strait of Hormuz. Any disruption to these routes can affect latency, bandwidth availability and service reliability across multiple markets.
At the same time, data centre development is facing broader operational challenges. Certain challenges are influencing project timelines globally such as power availability, equipment procurement and supply chain constraints.
What these factors indicate is that digital infrastructure is closely tied to geopolitical stability, energy security and global trade networks.
Resilience Is Becoming a Core Design Principle
The way the industry thinks about resilience is changing. Earlier, resilience mainly meant having backup systems within the same city or region. Today, organisations are taking a much wider view. They are looking at spreading infrastructure across different locations, reducing dependence on a single jurisdiction and building greater control over critical digital assets.
As governments and businesses become more conscious about data security and control, ideas such as “data embassies” and “compute sovereignty” are getting more attention. The focus is no longer only on protecting data itself. Increasingly, equal importance is being given to securing the infrastructure where that data is stored and processed.
Energy security is turning out to be another critical factor. Data centres are consuming larger amounts of power as AI workloads continue to expand. So, renewable energy integration, efficient cooling systems and long-term power reliability are being laid more emphasis on than before.
India’s Emerging Strategic Advantage
As companies rethink where they invest in digital infrastructure, countries that can offer scale, stability and supportive policies are gaining attention, with India bieng increasingly one of them.
The country’s data centre capacity has grown rapidly, from around 375 MW in 2020 to over 1,500 MW in 2025. Another 500 MW is expected to be added in 2026 alone, representing nearly 30% growth. Rising internet usage, growing cloud adoption, AI-led demand and the continued digitisation of businesses and government services are driving this expansion.
Apart from that, policy support has also helped strengthen India’s position. As a stronger framework for data governance and security is much needed, the Digital Personal Data Protection (DPDP) Act has offered the same. On top of that, initiatives such as Make in India, Atmanirbhar Bharat and wider e-governance programmes are encouraging more digital infrastructure to be built locally.
Another crucial step in this direction is MeitY’s framework for classifying government data based on sensitivity, particularly for data security and sovereign cloud adoption. Adding to this momentum, the Union Budget 2026–27 has proposed a tax holiday until 2047 for foreign cloud providers using India-based data centres to serve global markets, a significant development that could attract significant international investment.
A Defining Moment for India’s Digital Infrastructure Sector
What is happening in the global data centre industry is more than a temporary shift. Companies are no longer looking only at cost and efficiency. Increasingly, they are thinking about resilience, security and reducing dependence on a few locations. Recent geopolitical tensions have made that even more important.
For India, this opens up a real opportunity. The country already has strong demand, a rapidly growing digital economy and supportive policies. But potential alone is not enough. To ensure reliable connectivity, energy availability and supply chain readiness, a continued focus will be needed.
Overall, the next few years are going to be quite crucial from a strategy point of view. Whether India becomes a key hub in the global digital infrastructure network or remains largely a market that depends on infrastructure developed elsewhere– it will depend on decisions made now.