India's data centre capacity set for 5x surge by 2030: Crisil

India's data centre industry is poised for an unprecedented investment boom, with installed capacity expected to increase five-fold to around 7.5 gigawatts (GW) by March 2030, attracting investments of more than Rs 3 lakh crore over the next four financial years, Crisil Ratings said in a report on Tuesday.

The expansion, fuelled by generative artificial intelligence (GenAI), enterprise digitalisation and rising data consumption, is set to transform the country's digital infrastructure landscape.

However, the industry's ability to translate demand into sustainable returns will depend critically on timely power connectivity, regulatory clearances and disciplined project execution.

"Nearly half of the upcoming capacity is already committed under long-term contracts, limiting speculative development and reducing offtake risk," Crisil Ratings said. "Upfront tie-ups with hyperscalers, driven by cloud adoption and compute-intensive GenAI workloads, provide revenue certainty from the outset. This helps de-risk projects, even as the scale and speed of the planned build-out intensify execution requirements."

Strong demand from global hyperscalers, driven by cloud adoption and increasingly compute-intensive GenAI workloads, is also supporting investment decisions and reducing offtake uncertainty.

India's competitive cost structure is adding to its appeal as a data centre destination. Development costs are around 20 per cent lower than in several competing Asia-Pacific markets, reflecting relatively competitive land, construction and labour costs. Combined with lower power tariffs, this enables rental rates to be 30-35 per cent below those in peer markets. The availability of large campuses powered by renewable energy also strengthens India's proposition for hyperscalers seeking to meet sustainability commitments.

Says Anand Kulkarni, Director, Crisil Ratings, "India's structural cost advantages further strengthen its attractiveness as a data centre destination. Development costs are around one-fifth lower than in several competing Asia-Pacific markets owing to more competitive land, construction and labour costs.”

He further said, “Combined with lower power tariffs, this translates into rentals that are 30-35 per cent lower than in peer markets. The ability to develop large, renewable-powered campuses also aligns well with the sustainability goals of hyperscalers, reinforcing India's competitive positioning."

However, the scale of the planned expansion is placing considerable pressure on power infrastructure. Nearly three-fourths of the approximately 6 GW of upcoming capacity is expected to be concentrated in Visakhapatnam, Mumbai and Hyderabad, Crisil said.

By fiscal 2030, data centre capacity in these cities could be equivalent to around 80%, 60% and 20%, respectively, of their current peak electricity demand. This concentration makes timely grid connectivity and transmission capacity augmentation critical to avoiding commissioning delays and cost overruns.