India’s Data Centre & AI Infrastructure: A Rising Force Under Transparent Regulation

India’s digital infrastructure is entering a decisive growth phase. With a clear regulatory regime, global-scale investments, and an AI-driven demand surge, the country is positioning itself as both a domestic backbone for Digital India and a strategic node in the global compute economy.

Policy & Regulatory Signals – Evolution and Current Landscape

India’s data-centre and AI-compute ecosystem has benefited from a progressively structured regulatory journey, moving from basic data-protection norms to a full-fledged digital-infrastructure framework:

1. Early Foundations (2018–2022):

• National Cloud & Empanelment: The Ministry of Electronics & IT (MeitY) began formally empanelling Cloud Service Providers (CSPs) and Managed Service Providers (MSPs) under the “GI-Cloud (MeghRaj)” programme, creating a trusted roster of providers for government and critical sectors.

• Sectoral Localisation Rules: Financial regulators such as the Reserve Bank of India (RBI) mandated that all payment-system data be stored within India, while SEBI issued similar guidelines for capital-market entities, laying the groundwork for broader data-sovereignty requirements.

2. Strengthening Sovereignty & Privacy (2023):

• Digital Personal Data Protection Act, 2023 (DPDP): India’s first comprehensive privacy law mandated that sensitive personal data of Indian citizens remain on domestic servers unless explicit conditions for cross-border transfer are met.

• This Act aligned India with global standards like the EU’s GDPR, assuring multinational investors of predictable compliance norms.

3. Accelerating AI and Compute (2024):

• IndiaAI Mission Launch: In March 2024, the Government unveiled a flagship programme to democratise AI compute, including:

  • Subsidised GPU access at ₹65–92 per GPU-hour, well below commercial hyperscaler pricing.

  • A national plan to establish 600 data labs supporting startups, academia, and regional innovators.

• Ease-of-Business Enhancements: Fast-track clearances for data-centre parks, single-window permissions, and fiscal incentives for renewable-powered facilities were integrated into Digital India 2.0.

4. Current Framework (2025 and Beyond):

• Integrated, Transparent Oversight: MeitY now runs a mature CSP/MSP empanelment system that welcomes both domestic and global players while enforcing stringent cybersecurity and service-level standards.

• Unified Compliance Across Sectors: RBI, SEBI, and other regulators have harmonised localisation mandates, ensuring that critical financial, healthcare, and government data remain within Indian borders.

• Green & Resilient Infrastructure: Policy pushes—such as priority grid access for renewable energy, incentives for on-site generation, and proposed efficiency benchmarks (targeting PUE ≤1.3 by 2030)—align India with leading global sustainability practices.

In sum, India has moved from piecemeal guidelines to a comprehensive, investment-friendly, and sovereignty-focused regime. This layered evolution underpins the country’s rapid build-out of data-centre and AI-compute capacity and positions it as a reliable hub for both domestic and international stakeholders.

Scale and Trajectory

Metric	India (2025)	Projection 2030	Global Context
Installed DC Capacity	~1.26 GW (up from 375 MW in 2020)	4.5 GW+	Global capacity growing ~15% CAGR, hyperscalers to reach 60% share by 2029
Investment Pipeline	US$20–25 B by 2030	–	Global DC M&A hit US$34.4 B in 2024; capex by big tech to top US$320 B in 2025
Edge DC Capacity	60–70 MW (2024)	200–210 MW (2027)	Edge share globally ~8% and rising
IndiaAI GPU Pool	38,000+ GPUs mid-2025	Ongoing expansion	Nvidia global market cap crossed US$4 T amid AI demand

Mumbai and Chennai together host ~65% of India’s live capacity, with Delhi-NCR, Bengaluru and Hyderabad as secondary hubs. Hyperscalers such as Google, Microsoft and AWS are now buying and banking land for self-build campuses exceeding 150 MW each

Growth Drivers

1. Digital Explosion: India’s generative-AI market is growing at 28% CAGR (2023–30), multiplying high-density rack demand and pushing liquid-cooling adoption

2. Capital Inflows: Blackstone, Brookfield, Digital Realty, GIC and others view Indian DCs as a core real-estate-plus-technology asset, targeting 25%+ IRR in develop-and-sell models

3. Energy Transition: Hyperscalers are locking long-term renewable PPAs; Equinix and CleanMax announced 33 MW captive solar in India

4. Edge & AI Compute: IoT, 5G, AR/VR and low-latency apps are driving prefab modular and Tier-II city deployments.

Global Benchmarks and Lessons

• Energy Appetite: Goldman Sachs projects 165% global DC power demand growth by 2030. India’s own grid upgrades and renewable build-out must match this curve.

• Sovereign Clouds: The sovereign-cloud market is projected to grow 20–36% CAGR into the 2030s. TCS launched India’s Sovereign Secure Cloud in 2025, echoing EU and U.S. government-cloud models.

• Sustainability Metrics: Best-in-class Power Usage Effectiveness (PUE) globally is near 1.1; India’s policy targets ≤1.3 by 2030, aligning with EU Energy Efficiency directives

Key Challenges

• Energy & Carbon: Data centres may double India’s electricity demand by 2030. Integration of solar, wind, storage and even small modular reactors (SMRs)—already piloted by AWS and Equinix abroad—will be critical

• Talent & Tier-II Reach: Skilled technicians and reliable connectivity outside metros remain constraints.

• Regulatory Complexity: New data-protection rules, green-building codes and evolving ESG mandates add compliance costs.

Strategic Implications

• Economic Impact: With US$20–25 B domestic investment plus foreign capital, the sector can create tens of thousands of jobs across construction, operations and AI R&D.

• Innovation & Equity: Subsidised GPUs and 600 data labs lower barriers for start-ups and universities, fostering indigenous large-language models and domain-specific AI.

• Geopolitical Leverage: India’s transparent regime and large market make it an alternative to China for global hyperscalers seeking resilient, rule-of-law jurisdictions.

Outlook

India has already surpassed its original 2025 target of 1 GW, achieving an installed IT load of roughly 1.26 GW as of mid-2025. This milestone reflects a five-year compound annual growth rate (CAGR) of nearly 26 %, driven by hyperscale builds in Mumbai, Chennai and Delhi-NCR and a rapid shift toward AI-ready, high-density racks (≥20 kW per rack) supported by liquid-cooling and redundant 2N power architectures.

Looking ahead, current project pipelines and land-banked sites indicate a realistic pathway to 4.5 GW or more of live capacity by 2030:

• Pipeline Commitments: Developers and hyperscalers have already announced >3 GW of under-construction or approved capacity across India’s seven primary DC hubs, with average capex of US $6–7 million per MW

• Energy Integration: State policies now allow direct renewable power procurement, hybrid solar-wind PPAs, and on-site generation, enabling facilities to meet sub-1.3 PUE and 70 %+ renewable-energy targets—benchmarks aligned with global hyperscaler standards

• AI Workloads: Generative-AI training clusters require rack densities of 30–75 kW and GPU clusters exceeding 10 MW per hall, pushing operators to deploy immersion and direct-chip liquid cooling.

With these structural drivers—transparent regulation, aggressive renewable adoption, and the explosion of AI compute demand—India is on course to become a premier Asia-Pacific AI power-hub, in the same league as Singapore and Japan, and an essential node in the global high-performance computing supply chain.

*****

*****

#AI #DigitalInfra #DataCenter #IndiaAI #Hyperscal #Edge #RESI #DCAI #DataCentresAssociationofIndia, #CDI&AIDCIndia, #Confederation of #DigitalInfra & #AI #DataCentres , #Council on #DataCentres & #AI #Ecosystem in #India #CDCAIIndia, #NationalDataCentreCouncilofIndia, #NDCCI

Citation: Renewable Energy Society of India & National Data Centre Council of India (2025). India’s Data Centre & AI Infrastructure: A rising force under transparent regulation. Renewable Energy Chronicles: The Power Saga.