India's Data Center Capacity to Jump 5X to 8GW by 2030, Requiring $30 Billion Investment

India's data center industry is projected for a massive expansion, aiming to increase its total capacity five times to 8 Gigawatts by 2030. This growth trajectory is supported by an estimated investment of $30 billion.

Key factors fueling this expansion include the escalating demand for data, widespread adoption of cloud services, regulatory mandates for data localization within India, and the increasing use of Artificial Intelligence (AI) applications.

The substantial investment is expected to boost data center leasing revenues fivefold, reaching approximately $8 billion by 2030.

The sector is currently experiencing very high demand, operating at nearly full capacity with occupancy rates averaging 97 percent. Colocation capacity, where businesses lease infrastructure, has already seen a fivefold increase to 1.7 Gigawatts.

Mumbai and Chennai are the primary hubs, accounting for about 70 percent of the total installed capacity, with Mumbai alone holding roughly half due to its strategic location near undersea cable landing stations and its importance for financial services.

By 2030, Bharti Airtel Limited, Reliance Industries Limited, and Adani Enterprises Limited (through AdaniConneX) are expected to control 35-40 percent of India's data center capacity. AdaniConneX and Reliance are particularly set to lead a significant portion of new capacity additions.

The report highlights that AI servers consume considerably more power and require advanced liquid cooling systems, intensifying future demand. Regulatory developments such as the Digital Personal Data Protection Act, 2023, and Reserve Bank of India's data localization guidelines are also compelling companies to store data within India.

The $30 billion capital expenditure is expected to create opportunities across various sub-sectors, including electrical and power systems ($10 billion), racks and fit-outs ($7 billion), real estate ($6 billion), cooling systems ($4 billion), and network infrastructure ($1 billion).

Impact This news is highly significant for the Indian stock market, signaling substantial growth opportunities in the technology infrastructure sector. It highlights major investment themes like AI readiness, cloud computing, and digital sovereignty, potentially boosting the valuations and growth prospects of listed companies involved in data centers and related infrastructure. Impact Rating: 9/10

Difficult Terms: Gigawatt (GW): A unit of power equal to one billion watts, often used to measure large-scale electricity generation or consumption. Colocation Data Centre: A type of data center where businesses lease space, power, cooling, and networking infrastructure from a third-party provider instead of building their own. Data Localisation: The practice of ensuring that digital data is stored and processed within the geographical boundaries of a specific country or region. Artificial Intelligence (AI) Servers: High-performance computers specifically designed to handle the complex computational tasks required for AI applications, often requiring more power and advanced cooling. Liquid Cooling Systems: Advanced cooling technologies that use liquids instead of air to dissipate heat from high-density computing equipment, essential for AI servers. Digital Personal Data Protection (DPDP) Act, 2023: An Indian law that governs the processing of digital personal data, aiming to protect individuals' privacy. Reserve Bank of India (RBI): India's central bank, which issues guidelines, including those related to data localization for financial entities.