New Delhi, July 1 (IANS) India’s share of the global data centre market is projected to nearly double from 2–3 per cent in FY26 to roughly 5 per cent by FY30 as AI‑led workloads, exponential growth in digital consumption, and cloud adoption drive rapid capacity expansion, a report said on Wednesday.
The report from KPMG in India highlighted that India’s data centre market growth is underpinned by strong demand visibility, large-scale investments and supportive policy frameworks.
The market is expected to grow from roughly $1.7 billion in FY26 to roughly $6.8 billion by FY30, reflecting a significant expansion in market size and global relevance.
Installed capacity has more than tripled since FY19 to about 1.9 gigawatts in FY26, with an additional pipeline of about 4.5 gigawatts expected over the next five years, the report added.
Growth is increasingly being driven by hyperscale cloud providers, global content platforms and AI-first companies, marking a shift from traditional enterprise and telecom-led demand.
AI and high-performance computing workloads are expected to play a defining role, with such workloads projected to account for roughly 55 per cent of total capacity by FY30.
The sector is witnessing a structural shift towards high-density, AI-ready infrastructure, with advanced cooling systems, higher power requirements and GPU-intensive architectures.
India offers structural advantages including low construction costs, cost-effective power and a large IT and AI talent pool, strengthening its competitive position globally.
Strong digital fundamentals are driving demand with over 950 million internet users, over 660 million smartphone users, and rapidly growing data consumption.
Data localisation regulations, including the Digital Personal Data Protection (DPDP) Act, are expected to significantly boost domestic data centre demand.
Over $120 billion of investments have already been committed by hyperscalers, global operators and Indian players, signalling strong long-term confidence in the market.
Rohan Rao, Partner, M&A Consulting, KPMG in India views the country's data centre sector is at an inflection point where demand, capital and technology are converging to drive large-scale infrastructure development.
"The transition toward AI-led workloads is fundamentally changing the design, scale and economics of data centres across the country. With strong domestic demand and favourable cost structures, India is well positioned to become a key node in the global digital infrastructure ecosystem,” he added.
—IANS
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