The country’s data centre industry has expanded rapidly in recent years, with installed capacity rising more than fourfold from 375 MW in 2020 to around 1,575 MW currently, according to data shared by the Ministry of Electronics and Information Technology (MeitY) in the Rajya Sabha.
The government said data centres have emerged as an important part of India’s digital infrastructure ecosystem, with the rapid growth of artificial intelligence (AI) and high-performance computing driving increasing demand for computing capacity.
“Data centres are an important & integral component of the Digital Infrastructure ecosystem,” MeitY said in its response to a Rajya Sabha question on investments from major technology companies in the AI data centre sector.
From 375 MW to 1,575 MW
India’s installed data centre capacity has increased from 375 MW in 2020 to about 1,575 MW currently, representing an increase of more than four times in six years.
The expansion reflects the growing importance of data centres as companies build infrastructure to support cloud computing, AI workloads and other data intensive applications.
The government noted that the data centre industry has been growing at a steady pace, while the rapid adoption of AI and high performance computing is creating additional demand for capacity.
Data centres spread across major cities
The country’s data centre infrastructure is no longer concentrated in a single market. According to the government, facilities are located across several major technology and business hubs, including Mumbai, Navi Mumbai, Chennai, Hyderabad, Bengaluru, Noida and Jamnagar, among others.
The geographical spread of these facilities is important as India looks to build the infrastructure required for its expanding digital economy and AI ecosystem.
The government also highlighted the importance of developing AI ready data centre infrastructure connected to international subsea cable networks and reliable clean energy sources.
Such infrastructure can provide low latency international connectivity and support large scale AI workloads, while strengthening India’s competitiveness in cloud and AI services, the government said.
AI could accelerate demand
The government’s assessment comes at a time when AI is significantly increasing computing requirements. Large AI models and high performance computing applications require substantially greater computing power and specialised infrastructure than conventional workloads.
MeitY said the rapid growth of AI and high performance computing is already driving increasing demand for data centre capacity in India.
The expansion of data centres is therefore becoming closely linked with India’s broader ambition of developing an AI ecosystem, including domestic computing capacity, foundational models and indigenous applications under the IndiaAI Mission.
The government said the IndiaAI Mission is aimed at building a sovereign AI stack encompassing compute capacity, foundational models and indigenous applications.
Government pushes data centre infrastructure
The government has taken several measures to support the sector. Data centres were included in the Harmonised List of Infrastructure Sub Sectors in October 2022, which enables easier access to finance.
Building parameters for data centre buildings have also been included in the National Building Construction Standard, 2026. In addition, the Union Budget 2026-27 made a long term announcement concerning companies providing cloud services globally using data centres located in India, with the aim of attracting investments into the sector.
States are also competing to attract data centre investments. The government said several states have introduced data centre policies, primarily focusing on ease of doing business and the creation of industry-ready infrastructure.
Clean energy becomes critical
As data centre capacity expands, access to reliable and sustainable power is becoming increasingly important.
The government pointed to several initiatives promoting renewable energy, including the Green Energy Open Access Rules, Green Energy Corridor Scheme, Green Term Ahead Market, National Green Hydrogen Mission, the National Programme on High Efficiency Solar PV Modules, Offshore Wind VGF Scheme and Solar Park Scheme.
The government believes that combining data hubs with international subsea cable connectivity and clean energy can help India develop a more resilient and sustainable digital economy.
For India, the next phase of the data centre boom is therefore likely to be shaped not just by how much capacity is built, but also by where that capacity is located, how quickly it can connect to global networks and whether it can secure reliable and increasingly cleaner sources of power.
