Amid rising AI-driven workloads, increasing cloud adoption, widespread adoption of 5G technology, and evolving data localisation requirements, KPMG in India’s latest report, “India’s Data Centre Revolution – The Integrated Lifecycle Blueprint (2026-2030)”, indicates that India’s data centre industry is entering a phase of accelerated expansion. The report highlights that while digital infrastructure demand continues to grow rapidly, the sector’s biggest challenge is no longer lack of demand, but the increasing complexity involved in delivering scalable, compliant, and operationally integrated infrastructure solutions.
The report examines India’s evolving data centre ecosystem across infrastructure readiness, AI-enabled capabilities, regulatory frameworks, ESG considerations, capital access, and operational complexities. It highlights that the market is increasingly shifting away from fragmented service provider models towards an integrated lifecycle partner approach that combines planning, building, deployment, operationalisation, and maintenance under a single accountability framework. According to the report, this transition is becoming increasingly important as organisations navigate AI readiness, sovereign cloud requirements, capital efficiency challenges, and regulatory compliance requirements.
Key findings from the report
– India’s total data centre sector revenue is projected to reach approximately USD 45.69 billion by 2033
– India’s AI-optimised data centre market, valued at approximately USD 588.6 million in 2024, is projected to reach nearly USD 3.55 billion by 2030, growing at an estimated CAGR of 35.1 per cent
– Traditional infrastructure designs based on legacy air-cooling systems are becoming inadequate for modern GPU-intensive AI workloads
– AI-ready data centres are expected to require specialised liquid cooling systems and high-density power distribution frameworks
– The Digital Personal Data Protection (DPDP) Act 2023 is accelerating the need for local data residency infrastructure and compliant data processing architectures
– ESG considerations are increasingly influencing investment attractiveness, with operators focusing on renewable energy integration, efficient power usage, and sustainable infrastructure models
– India permits 100 per cent Foreign Direct Investment (FDI) under the automatic route for data centres, supporting capital inflows into the sector
KG Purushothaman, Head – Digital Solutions and National Leader – Artificial Intelligence, KPMG in India, said, “India’s data centre industry is moving into a new phase of accelerated growth driven by AI-led workloads, cloud adoption, and evolving data localisation requirements. As infrastructure demand increases, the market will require integrated execution models that can combine engineering capabilities, AI readiness, regulatory understanding, and operational accountability to support large-scale and future-ready digital infrastructure development.”
Unaise Urfi, Partner – Digital Solution, Strategy and Insights, KPMG in India, said, “India’s data centre ecosystem is entering a phase where execution capability will become as important as infrastructure capacity creation. As deployment complexity increases across AI readiness, regulatory compliance, operational efficiency, capital structuring, and ESG priorities, organisations will increasingly require integrated lifecycle partnership models that can enable more seamless, scalable, and coordinated infrastructure delivery.”
The report further highlights that India’s data centre market is entering a decisive phase where integrated execution capabilities, AI readiness, regulatory expertise, and financial structuring are expected to become key differentiators across the ecosystem. As the market evolves towards consolidation by 2030, the report notes that future growth will increasingly depend on the ability to combine complex engineering, operational accountability, and lifecycle partnership models to support scalable and future-ready digital infrastructure development.