Archive · 7 Aug 2026
India's data centre boom builds foundations for digital future
Think of a data centre like a giant library for computers.
It stores all the information that apps, websites, and digital payments use.
When you check crop prices on a phone or watch an online class, a data centre is helping.
India is building lots of these computer libraries right now.
In 2020, India had enough of them to use about 0.5 gigawatts of electricity.
That number has grown to about 1.575 gigawatts already.
Experts think it could grow much bigger by 2030.
The government is helping by treating data centres like highways and trains, and even offering a 20-year tax holiday.
These buildings use a lot of electricity and water, but companies are trying to use solar and wind power and recycle water.
Building them also creates many jobs for engineers, electricians, and other workers.
India's data centre capacity has grown from about 0.5 gigawatts in 2020 to roughly 1.575 gigawatts today.
Capacity is predicted to rise to between 6.5 and 10 gigawatts by 2030.
Nearly USD 95 billion in investments were pledged to the sector between 2019 and 2025.
Data centres were designated as important infrastructure, and a 20-year tax holiday was proposed for eligible operators.
Industry reports estimate India's data centres could need up to 150 billion litres of water a year for cooling.
- Who
- The Indian government (including the Ministry of Electronics and Information Technology), state governments, and private technology companies investing in data centre infrastructure.
- What
- The rapid expansion of India's data centre industry, which processes, stores, and sends data for digital services.
- When
- From 2020 to the present, with projections to 2030 and the Viksit Bharat 2047 vision.
- Where
- India, with major hubs in Mumbai, Chennai, and Hyderabad, and emerging hubs such as Visakhapatnam.
- Why
- To support India's growing digital economy, protect data sovereignty, create jobs, and attract foreign investment.
Sceptics
Proponents
Water and energy use
Sceptics
Industry reports warn India's data centres could need up to 150 billion litres of water a year, mainly for cooling, and their electricity needs are enormous, raising environmental concerns.
Proponents
Operators are already using closed-loop cooling, recycled water, air-side cooling, and renewable energy pairing, making environmental impact a manageable growing pain for a maturing industry.
Data localisation
Sceptics
Keeping data within India could be seen as protectionism that may deter foreign investment and limit global data flows.
Proponents
Localising data is caution, not protectionism, keeping bank records, health information, and communications under Indian law and jurisdiction.
- Installed capacity (2020)
- About 0.5 gigawatts
- Installed capacity (now)
- About 1.575 gigawatts
- Projected capacity (2030)
- 6.5-10 gigawatts
- Investments pledged (2019-2025)
- Nearly USD 95 billion
- Estimated annual water use
- Up to 150 billion litres
- National policy
- Draft National Data Centre Policy presented in 2020 by MeitY
- Tax incentive
- Proposed 20-year tax holiday for eligible operators
- Projected digital economy GDP contribution (2030)
- $1 trillion