India Eyes Data Hub Status Amidst Power Pains

India is strategically positioned to emerge as a significant data center hub within the Asia Pacific region. This potential hinges on effectively addressing complex power and grid infrastructure challenges, alongside integrating renewable energy sources to match the pace of digital expansion. As of 2026, India consumes nearly 20% of global data but hosts less than 5% of the world's data centers, presenting a substantial opportunity for growth.

Driven by AI advancements, India's data center capacity is projected to expand from approximately 1.5 GW in 2025 to 8-10 GW by 2030. This expansion is anticipated to increase electricity demand significantly, requiring an additional 40-45 terawatt hours by 2030. This would elevate the sector's share of national electricity consumption from about 0.8% to 2.5-3%.

Key structural challenges include a potential energy supply gap due to power generation not keeping pace with new data center builds. Grid stability limitations and constrained substation capacities could also strain operations. Regulatory variations across states regarding renewable energy policies further introduce uncertainty for developers.

Deloitte's recommendations involve accelerating renewable integration through hybrid solar-wind models with storage, expanding green power purchase agreements, and upgrading transmission networks. Creating dedicated Data Centre Economic Zones with pre-built infrastructure and standardized grid connection timelines is also advised. Standardizing state-level renewable policies and leveraging AI for energy use optimization are also crucial steps.

With the right policy alignment, grid infrastructure enhancements, and effective renewable deployment, India can establish itself as a globally competitive and sustainable AI infrastructure leader. This strategic development would solidify its position at the forefront of the next digital growth era and strengthen long-term energy security.