Inside India’s data centre rush: Winners and risks

New Delhi: India is in the middle of a once-in-a-generation build-out of digital infrastructure. Investment commitments have crossed 60 billion dollars in the past six years and are on track to exceed 100 billion dollars by the end of 2027, a pace few markets can match.

The new geography: which states are turning into hotbeds

A state-by-state race is now shaping the country’s server map. Maharashtra, Tamil Nadu, Telangana, Uttar Pradesh and West Bengal have pulled ahead on cumulative commitments, thanks to coastal cable access, power availability and on-ground facilitation. Within this network, Mumbai remains the heavyweight, followed by Chennai, Delhi-NCR and Bengaluru; together these four still account for about 90% of installed stock.

An east-coast pole is emerging as well. Google and Adani have announced a one-gigawatt AI campus at Visakhapatnam, paired with a new subsea gateway, which is set to attract more traffic and capacity to Andhra Pradesh and the Bay of Bengal corridor.

Beyond the big four metros, the spread is visible in Greater Noida, which is scaling on land and park availability; in West Bengal, which is pitching an eastern-hub strategy; and in Tier-2 and Tier-3 cities, which are beginning to attract edge facilities that bring latency-sensitive workloads closer to users.

The leaderboard: who is in pole position and who can catch up

Hyperscalers continue to set the pace. AWS has committed Rs 60,000 crore to expand its Hyderabad region after already commissioning three sites in Telangana, which keeps the state firmly on the front foot.

Reliance is aiming for scale that could reset the market. Its planned Jamnagar park is widely reported at about three gigawatts and has been billed as the world’s largest single-site development; if even a large portion lands on time, Jio would jump into the top tier by capacity.

Adani, through AdaniConneX, is rolling out a multi-city platform and is co-developing the one-gigawatt Visakhapatnam campus with Google. The combination of city rollouts and a marquee AI hub positions the group to run neck and neck with any domestic challenger over the next three to five years.

International colocation specialists are deepening their presence. Equinix has inaugurated a flagship site in Chennai to serve interconnection-heavy enterprise demand, while NTT is partnering with Neysa and the Telangana government on a 400-MW AI cluster in Hyderabad that targets 25,000 GPUs, signalling a clear focus on next-generation workloads.

Among Indian incumbents, Airtel’s Nxtra continues to add scale and is signalling a sustainability tilt that many global customers now require. Tata Consultancy Services has announced a 6.5-billion-dollar plan to build one gigawatt of capacity over five to seven years, framed as “sovereign” data centres, indicating that the group intends to be a capacity heavyweight rather than only a tenant. Real-estate-backed entrants are also accelerating; Anant Raj, for example, plans to move from 28 MW to 307 MW by 2032 by using pre-zoned sites with assured power.

Taken together, AWS and Microsoft look set to dominate cloud spend, while on raw power and local control Reliance’s Jamnagar plan is the single most consequential swing factor. AdaniConneX’s multi-market rollout and the Visakhapatnam AI hub position it as the other domestic giant. Nxtra, STT GDC and Sify should retain significant share on the strength of existing campuses and enterprise ties, while TCS and Anant Raj represent the next wave of capacity builders that can close the gap as AI demand rises.

How India stacks up globally

India still trails the mega-hubs; Northern Virginia alone exceeds India’s current capacity. The catch-up, however, is quick. Capacity is expected to reach around 2,000 MW by 2025 and 4–5 GW by 2030, which would place India alongside the largest APAC markets outside China.

Cost is a quiet superpower. Building one megawatt of capacity costs a median 6.8 million dollars in India, compared with roughly 11.2 million in Singapore, 9.2 million in Australia and 12.7 million in Japan. Cheaper land and a competitive construction base stretch investor dollars further than in rival hubs.

Why global tech is picking India

Demand is large and rising, driven by the scale of India’s internet user base, the rapid adoption of cloud and the early pull of AI workloads. Policy has improved the outlook: “infrastructure status” for data centres, the Digital Personal Data Protection Act and the government’s MeghRaj cloud empanelment have strengthened financing, approvals and clarity around data flows. States are adding subsidised land banks, electricity-duty waivers and single-window clearances that reduce time to go live for large parks.

Power and connectivity are improving in parallel. Operators are contracting captive renewables; Nxtra already sources 49% green power for its core facilities. New submarine cables are landing, and the Visakhapatnam hub adds a fresh subsea gateway on the east coast, which elevates India’s role as a regional node rather than only a domestic terminus.

The climate trade-off, in plain words

Data centres are the factories of the internet. They run continuously and need large amounts of electricity for servers and reliable cooling to prevent overheating. As AI use grows, both requirements increase.

Siting decisions matter. When a centre runs on cleaner power, its emissions fall. India’s grid is getting greener, and the quickest win is to pair each large campus with new solar, wind and storage from day one. Some operators are already moving in this direction; Nxtra reports that nearly half the power at its core sites comes from renewables, which is the trajectory the wider market will need to follow.

Water is the other cost that cities notice. Large halls can strain supplies in stressed basins, which is why treated or recycled water, designs that limit evaporation and, where feasible, coastal or water-secure sites are prudent choices.

Fairness to the grid also matters. If very large clusters connect in weak zones, homes and small businesses can feel the squeeze. Better-planned projects co-invest in new transmission lines and onsite storage so that they do not lean on the same capacity that others rely on.

The AI twist: design, density and the cooling revolution

AI changes the design brief. High-density racks and GPU clusters create heat loads that older halls cannot handle. Indian facilities are pivoting to liquid-cooling and hot-aisle containment, and Sify’s sites in Chennai, Noida and Mumbai are the first in India to receive Nvidia’s DGX-Ready certification for up to 200 kW per rack, which is the threshold needed for modern AI servers.

The shift is material. The International Energy Agency warns that global data-centre electricity consumption could double by 2026 to about 1,000 TWh, and countries such as Ireland are already planning for data centres to approach a third of national load. India will need to expand capacity while reinforcing the grid and deploying more water-wise cooling, or growth will meet bottlenecks.

Risks to watch

Power availability and transmission build-out must keep pace with 24×7 loads. The Visakhapatnam project’s plan for lines and storage reflects that need. Financing is another pressure point because operators front-load capital spending; execution discipline will matter in a world of tighter money. Sustainability scrutiny is also rising, and norms on diesel backup, recycled water and heat reuse are likely to move from optional to expected.

What the next three to five years look like

The direction of travel is clear. Installed capacity of roughly 1.25–1.6 GW in 2024 is guided to around 2.07 GW by the end of 2025 and to about 4.5 GW by 2030, implying a multi-year construction boom. Colliers describes India as a “global DC hotspot” and expects the real-estate footprint to broaden to roughly 55 million square feet by decade-end. That may still under-shoot if AI demand accelerates faster than expected.

Front-runners on scale include Reliance, provided Jamnagar lands on schedule, AdaniConneX with its multi-city platform and Visakhapatnam campus, and AWS with deep cloud demand and its Hyderabad expansion. Close chasers are Nxtra, STT GDC and Sify, which combine enterprise networks, interconnection and early AI-ready upgrades. The next wave is led by TCS and real-estate-backed builds such as Anant Raj, which can add meaningful megawatts as standardised campuses and power tie-ins become repeatable.

India is moving from a demand-led outpost to a hub in the global data economy. Costs favour building here, policy is more predictable, and power and fibre are improving. If execution keeps pace with ambition, the country will not only meet its own digital appetite but will also operate as a regional platform between the Pacific and the Gulf.