The country’s share of the global data centre market is projected to more than double from around 2-3 per cent in FY26 to nearly 5 per cent by FY30, with the domestic market expected to expand to around $6.8 billion (Rs 61,000 crore), according to a report by KPMG.
The report said the global data centre industry is entering a new phase of growth as rising demand from cloud computing, streaming services and artificial intelligence (AI) reshapes the digital economy. The global market, estimated at around $160 billion in FY26, is projected to reach nearly $300 billion by FY30. During the same period, global data centre capacity is expected to increase from 90-100 GW to 160-170 GW.
While the US and Europe continue to dominate the industry, accounting for 70-75 per cent of global data centre capacity, the report noted that investment momentum is steadily shifting towards the Asia-Pacific region, with India emerging as one of the fastest-growing markets.
According to KPMG, India’s data centre market is expected to grow from around $1.7 billion (Rs 14,000 crore) in FY26 to $6.8 billion (Rs 61,000 crore) by FY30. As a result, India’s share of the global market is expected to rise to nearly 5 per cent, up from the current 2-3 per cent.
The report highlighted that although India generates about one-fifth of the world’s data, it currently hosts only 2-3 per cent of global data centre capacity. This gap presents a significant opportunity for domestic capacity expansion while reducing dependence on overseas hosting infrastructure.
KPMG said India’s data centre industry has transformed significantly over the past decade, supported by affordable smartphones, low mobile data tariffs and rapid digitalisation across consumer and enterprise segments. Installed data centre capacity has more than tripled since FY19 to reach around 1.9 GW in FY26, while the development pipeline is expected to add another 4-4.5 GW over the next five years.
Currently, nearly 90 per cent of India’s data centre capacity is concentrated in Bengaluru, Chennai, Delhi NCR and Mumbai. However, Hyderabad and Pune are gaining momentum, while new projects are increasingly moving to Tier II cities, driven by better land availability, improving power infrastructure and supportive state government incentives.
The report said these factors, coupled with rising AI adoption, cloud investments and accelerating digital transformation, are expected to strengthen India’s position as a key global data centre hub over the coming years.
