NEW DELHI: India’s data centre industry is entering an investment super-cycle with installed capacity expected to increase five-fold to 7.5 Gigawatt (GW), attracting investments of more than ₹3 lakh crore over the four financial years through March 2030, credit rating agency Crisil said today.
“The surge is being driven by generative artificial intelligence (GenAI) led computing demand, enterprise digitalisation and rising data consumption. The pace of this expansion and credit quality of the data centre developers will hinge on timely power connectivity, regulatory approvals and disciplined project execution,” Crisil said.
It added that demand visibility is strong for the industry undertaking the capital-intensive expansion. Nearly half of the upcoming capacity is already committed under long-term contracts, limiting speculative development and reducing offtake risk.
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, Crisil said.
“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. Combined with lower power tariffs, this translates into rentals that are 30-35 per cent lower than in peer markets,” the agency said.
It added that the ability to develop large, renewable-powered campuses also aligns well with the sustainability goals of hyperscalers, reinforcing India’s competitive positioning.
However, this unprecedented growth in development is also creating a power infrastructure bottleneck. About three-fourths of the upcoming capacity of around 6 GW is expected to be built in Visakhapatnam, Mumbai and Hyderabad.
“By fiscal 2030, data centre capacity in these cities could rise sharply and equate to around 80 per cent, 60 per cent and 20 per cent, respectively, of their current peak power demand. This underscores the criticality of timely grid connectivity and transmission augmentation,” Crisil said.
It added that against this backdrop, disciplined growth backed by firm contracts provides an important safeguard for the developers. Existing facilities in India are operating at about 90 percent utilisation, and more than 95 per cent of capacity currently under construction is already contracted. This should support faster ramp-up in cash flows once projects are commissioned.
Source: Business Standard
