India’s Data Centre Market to Reach ₹1,00,491 Crore by 2032: Economic Survey Insights

India’s data centre market is witnessing remarkable expansion, with projections indicating an increase from ₹38,984 crore (US$ 4.5 billion) in 2023 to ₹1,00,491 crore (US$ 11.6 billion) by 2032. This growth, highlighted in the Economic Survey 2024-25, underscores the country’s evolving digital infrastructure, increasing demand for cloud computing, and government initiatives supporting data storage capabilities.

Key Drivers of Growth

Several factors contribute to this anticipated growth in India’s data centre market:

• Increasing Digital Adoption: The surge in internet usage, cloud computing, and data-driven services is propelling demand for data centres.
• Cost Advantage: India’s cost-effective IT ecosystem and affordable real estate make it a preferred hub for data centres. The average construction cost per megawatt (MW) in 2023 was ₹58.91 crore (US$ 6.8 million), significantly lower than markets such as Australia, Japan, and Singapore.
• Infrastructure Development: Government-backed initiatives and private investments in colocation facilities have boosted market expansion.
• Regulatory Support: Policies such as the GI Cloud initiative (MeghRaj) and approvals for public and private cloud service providers have strengthened the sector.

Colocation Data Centres and Capacity Expansion

Colocation data centres, which provide shared storage and computing services, are playing a pivotal role in India’s data centre growth. In 2023, India’s colocation data centre capacity reached 977 MW, reflecting a 105% year-on-year growth. Further expansion is on the horizon, with:

• 1.03 GW under construction for the 2024-28 period
• 1.29 GW planned for future development

These developments signal a rapid scale-up in India’s data centre infrastructure, supporting businesses, cloud service providers, and enterprises requiring secure and scalable storage solutions.

Government Initiatives Driving the Market

The Indian government has actively supported the sector through various initiatives, including:

• GI Cloud (MeghRaj): A framework aimed at optimising cloud infrastructure for government services. As of November 30, 2024, the National Informatics Centre (NIC) supports 1,917 applications on its cloud platform.
• Public-Private Partnerships: The government has impanelled 23 cloud service providers, ensuring robust support for digital governance and enterprises.
• Digital India & Data Localisation Policies: Increasing emphasis on local data storage is further driving investment in domestic data centre capacity.

Economic Survey and Its Role in Market Insights

The Economic Survey is an annual report assessing India’s economic performance and is prepared by the Economic Division under the Department of Economic Affairs, Ministry of Finance. The report serves as a key reference point for policymakers, investors, and industry stakeholders, providing insights into emerging trends such as data centre expansion and infrastructure investments.

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