India Surges: Datacentre Growth Fuels Global Digital Hub Ambitions

India is aggressively pursuing global prominence as a data infrastructure hub, signaling a transformative phase for its digital economy. This ambition is underpinned by an unprecedented surge in datacentre capacity, projected to expand by a remarkable 77% to reach 1.8 GW by 2027. This growth accelerates from already surpassing the 1 GW milestone in 2024, showcasing a robust 24% Compound Annual Growth Rate (CAGR) since 2019. The digital economy itself is forecast to contribute 20% to India's Gross Value Added (GVA) by 2029-30, driven by rapid AI adoption, cloud services, and the expansion of Global Capability Centres (GCCs).

Policy Framework for Growth

The dramatic expansion is not organic but strategically catalyzed by a wave of policy interventions at both central and state levels. Recognizing datacentres as critical infrastructure, the government is implementing significant incentives. These include tax exemptions on electricity duty, waivers on stamp duty, land subsidies, and proposed Goods and Services Tax (GST) input tax credits for developers. The draft National Data Centre Policy, 2025, acts as a forward-thinking blueprint, proposing streamlined single-window clearances and aggressive green energy adoption. This unified vision aims to reduce investor uncertainty, which has previously arisen from a fragmented state-level policy landscape, and solidify India's position as a global data powerhouse.

Sustainability as a Core Strategy

Aligning with its climate commitments, India's datacentre ambitions place sustainability at the forefront. The policy framework emphasizes green energy integration, advanced storage standards, and innovative solutions. This includes promoting AI-driven energy optimization, liquid cooling technologies, and renewable Power Purchase Agreements (PPAs). Green-certified datacentre capacity has already grown at a 15% CAGR, reaching 314 MW by April 2025, representing roughly one-fourth of the total capacity in major cities. This focus ensures that expansion aligns with environmental goals, proving growth and sustainability are interdependent.

Economic and Employment Boost

The implications of this datacentre boom extend far beyond infrastructure. Growth in this sector is expected to drive a significant increase in tech services revenue over the next three to five years, encompassing cybersecurity, cloud infrastructure management, AI-driven automation, and systems integration. Research indicates that every megawatt of datacentre capacity can create approximately 2,000 jobs. These roles span from highly skilled cybersecurity experts and cloud infrastructure engineers to AI/ML specialists and sustainability technologists. Furthermore, the expansion into Tier II and Tier III cities promises a more equitable distribution of economic benefits across the country, fostering digital inclusion and regional development.