India's Data Centers Primed for 5X Growth, Driven by AI and Localization Mandates

India's data center industry is poised for explosive growth over the next few years. As of 2025-11-13, the country's total data center capacity stands at 1.7GW, but this is expected to rise fivefold to 8GW by 2030. This surge in capacity is being driven by several factors, including the rapid adoption of Artificial Intelligence (AI), surging data consumption, cloud adoption, and strict data localization mandates imposed by the government.

The rise of large language models (LLMs) and generative AI is creating a significant new stream of demand for data center services. According to a report by Kotak Mutual Fund, AI workloads are expected to account for 35% of India's data center capacity by 2027, up from 15% currently. This shift is driven by the fact that AI models require significantly more computing power, with their needs being three to five times higher than traditional workloads.

To meet this growing demand, industry experts estimate that India will require a colossal $30 billion in capital expenditure by 2030. Setting up 1MW of data center capacity in the country typically costs between $4-5 million, and the additional 6.4GW of capacity needed will require this massive investment. However, the potential rewards are also substantial, with data center leasing revenues projected to reach $8 billion by the end of the decade.

Leading the charge in India's data center expansion are major players like Reliance, Adani, and Bharti Airtel. These companies are expected to account for 35-40% of the country's total data center capacity by 2030, as they ramp up their digital infrastructure investments. Other key players in the market include NTT GDC India, ST Telemedia, and Sify.