India's data-centre industry is entering a significant expansion phase as growing digital consumption, cloud computing adoption and artificial intelligence applications accelerate demand for digital infrastructure across the country.

According to a report by Nomura, India's installed data-centre capacity is expected to increase from approximately 1.6 gigawatts at present to more than 6-7 gigawatts by 2030, representing an annual growth rate of nearly 30%. Achieving this scale will require investments exceeding $35 billion over the next five years.

The growth outlook is supported by strong structural demand trends. India has added nearly 330 million internet users over the last five years, taking the total user base to around 950 million. During the same period, average mobile data consumption per user has almost tripled. Monthly mobile data traffic has risen from about 10 exabytes in 2020 to 27 exabytes in 2025, underscoring India's position as one of the world's largest and fastest-growing digital markets.

Despite this growth, the country's data-centre infrastructure remains relatively underpenetrated. Nomura estimates that India generates roughly 18 petabytes of data for every megawatt of installed data-centre capacity, significantly higher than comparable markets such as China and the United States. This highlights a substantial gap between data generation and infrastructure availability.

Cloud adoption is expected to remain a key growth driver. India's public cloud market is projected to expand from $10.9 billion in 2024 to $30.4 billion by 2029. Meanwhile, the domestic artificial intelligence market is expected to grow at an annual rate exceeding 40% through 2032.

The increasing shift of enterprise workloads from captive server facilities to third-party data centres is also supporting industry growth. Industry estimates cited by Nomura indicate that co-location facilities accounted for around 45% of India's data-centre market in 2020, compared with approximately 60% today. This share could increase to 70% over the next five years as businesses continue adopting cloud and hybrid-cloud infrastructure models.

Artificial intelligence is emerging as a major catalyst for capacity expansion. AI workloads require significantly higher computing power, advanced cooling systems and uninterrupted processing capabilities compared with conventional enterprise applications. Industry estimates suggest AI inference demand alone could push India's data-centre capacity requirements to nearly 7 gigawatts by the end of the decade.

Global technology companies are already investing heavily in anticipation of this growth. Major cloud providers including Microsoft, Google and Amazon Web Services have announced substantial investments in cloud and AI infrastructure in India. Domestic players such as Reliance Industries and Adani Connex are also expanding their presence in the sector through large-scale infrastructure projects.

The industry's strong growth prospects are attracting investor interest as well. Several data-centre operators, including Sify Technologies, CtrlS Datacenters, Yotta Infrastructure, Nxtra Data and ESDS Software Solutions, are evaluating public listing plans, potentially providing investors with direct exposure to one of India's fastest-growing infrastructure segments.

As artificial intelligence, cloud computing and digital services become increasingly important to economic activity, data centres are emerging as a critical pillar of India's digital infrastructure and long-term technology growth strategy.