India's data centre sector to attract ₹3 trillion investment through FY30

India's data centre sector is poised for unprecedented growth, with investments projected to reach ₹3 trillion through FY30, according to ratings agency CRISIL. The expansion reflects a sharp acceleration in capacity additions driven by surging demand from generative AI applications and broader digitalisation across the economy.

Data centre capacity is expected to increase fivefold to 7.5 gigawatts during the eight-year period, positioning India as an increasingly important hub for digital infrastructure in Asia. The growth trajectory is underpinned by rising adoption of cloud computing, data analytics, and artificial intelligence technologies across enterprises and public sector institutions.

However, the sector's expansion faces significant headwinds from India's power infrastructure constraints. Ensuring reliable, uninterrupted electricity supply at competitive rates remains a critical bottleneck that could impede the realisation of capacity targets. Power availability and grid stability will be essential factors determining whether the sector can achieve its growth projections.

The data centre boom also reflects India's strategic importance in global digital supply chains, particularly as multinational technology companies and hyperscalers seek to diversify infrastructure beyond traditional hubs. Policymakers will need to prioritise power sector reforms and grid modernisation to unlock the full potential of this high-growth segment.