India has emerged as the largest data-centre market in Asia-Pacific outside China, with its live IT capacity quadrupling over the past six years to 1.7 GW, according to BloombergNEF.
The country also has a substantial pipeline. About 1.3 GW of capacity is under construction, while another 3.2 GW of projects have secured the land, power and permits required to begin construction. Strong availability of energy and fibre connectivity are among the factors supporting India’s position as a preferred destination for data-centre development in the region.
Maharashtra remains the centre of gravity
Maharashtra continues to dominate India’s data-centre landscape, accounting for 55% of the country’s live IT capacity. It also has the largest pipeline of projects that have secured the necessary approvals to begin construction.
The state’s position is supported by a combination of enterprise demand and established digital infrastructure, including cloud regions, subsea cable connectivity and an established data-centre developer ecosystem.
The next phase of India’s expansion is expected to involve Andhra Pradesh, Gujarat, Karnataka, Tamil Nadu, Telangana and Uttar Pradesh, where companies have announced major investments and projects.
Hyperscale AI campuses drive investment
The scale of announced investment points to another significant phase of data-centre growth. Domestic conglomerates Adani and Reliance have committed $210 billion to data-centre development in India, representing 45% of total announced investment.
Global hyperscalers Google, Amazon and Microsoft form the next-largest investor group, with $84 billion in announced commitments. Around 95% of all announced investment is aimed at large hyperscale AI campuses.
The concentration of investment in AI infrastructure points to a shift in the country’s data-centre requirements as AI workloads drive demand for significantly greater computing capacity.
Electricity demand set to surge
The expansion will also put substantial pressure on India’s power infrastructure. BloombergNEF expects data-centre electricity demand to increase more than eightfold, from 11 TWh in 2025 to 91 TWh in 2035.
Power consumption is expected to accelerate as hyperscale facilities currently under construction become operational over the next three to 10 years. At the same time, hyperscalers’ net-zero commitments for 2030 are expected to increase demand for renewable electricity.
India’s installed electricity-generation capacity has grown at a 7.1% compound annual growth rate since 2021 to meet rising demand. However, slower expansion of transmission networks has previously delayed the commissioning of some generation projects. Similar constraints could affect the development of large data centres without adequate infrastructure planning.
Water emerges as a local constraint
Power is not the only infrastructure consideration. Water availability could become a more significant issue in specific locations as India’s data-centre footprint expands.
Most data centres in India rely primarily on air-based cooling systems, limiting immediate dependence on water. However, in water-stressed cities such as Chennai and Bengaluru, facilities using cooling systems with high water consumption could add pressure to already constrained local supplies.
The challenge for India’s next phase of data-centre growth, therefore, extends beyond adding capacity. The availability of power, transmission infrastructure, fibre connectivity and, increasingly, locally sustainable cooling resources will determine how effectively the country’s large pipeline can be converted into operational capacity.