India’s data centre capacity is projected to grow to 3.6 gigawatts by 2030, driven by heavy demand from hyperscalers like AWS, Google, and Microsoft. While the pipeline is large, investors should note that execution delays in power and equipment sourcing may limit actual operational growth.
India’s data centre sector is set for a massive expansion, with total capacity expected to climb to between 3 and 3.6 gigawatts (GW) by 2030. This growth is largely pushed by the rapid adoption of artificial intelligence and the increasing cloud infrastructure needs of hyperscalers, such as Amazon Web Services, Microsoft, and Google. These global giants are projected to command nearly 90% of the market demand by 2030, rising significantly from their current 60% share.
Execution Realities vs. Industry Targets
While some companies have announced ambitious plans to reach 6 to 8 GW of capacity, expert assessments suggest a more grounded outlook. The industry is currently operating at approximately 1.3 to 1.4 GW of installed capacity. Realistically, actual operational capacity by 2030 may settle closer to 2.8 GW, even if planned projects reach 3.4 to 3.6 GW. This difference arises from practical hurdles that can slow down infrastructure development. Securing power connections alone can take 18 months, and specialized backup generation equipment often involves a waiting period of up to two years, creating a bottleneck for new facility commissioning.
Rising Costs for AI-Ready Infrastructure
Building facilities to support AI operations requires higher spending compared to standard data centres. Traditional colocation centres typically cost between ₹44 crore and ₹46.6 crore per megawatt, excluding the expensive IT hardware. However, facilities specifically designed for AI workloads require more robust power and cooling systems, pushing costs up by 10% to 15% to a range of ₹48 crore to ₹54 crore per megawatt. This higher capital intensity means that developers must manage project budgets carefully to maintain profitability as they scale.
Long-Term Opportunities and Investor Focus
Despite these execution challenges, the momentum in the data centre pipeline remains high. The expansion offers potential long-term visibility for companies involved in the power, electrical equipment, and cooling sectors, which are essential for supporting these high-density facilities. Investors looking at this sector should track the actual commissioning timeline of announced projects rather than just the initial capacity commitments. The key monitorable will be whether developers can overcome power and equipment delays, as these factors will ultimately determine the revenue generation capability of new sites heading toward 2030.