The digital backbone of India is gearing up for unprecedented expansion. According to a new analysis, data center capacity in the country is expected to balloon from 1.8 GW to 10.5 GW by 2031 – a staggering six times increase. Artificial intelligence boom and data localization rules are the key drivers behind this projected leap.
Morgan Stanley’s in-depth report points out that AI-related operations might gobble up 6.8 GW on their own. Other factors like real-time data processing demands, robust localization norms, and rising computational needs are supercharging this trend.
India’s policy environment and shifting global landscapes are set to attract billions in investments into data centers over the long haul.
The report estimates $60 billion capex for scaling up, including essentials like land, electricity setups, cooling tech, and network gear.
Powering these power-hungry hubs will require more than $20 billion in electricity infrastructure upgrades. There’s a clear shift towards renewables and energy storage to ensure green operations.
Boosted by data rules, infra status, and state support, investments are surging, luring international players to India’s shores.
‘Domestic data storage bolsters sovereignty, cuts foreign dependency, and elevates India to a tech hub status,’ the report emphasizes.
Yet, hurdles like reliable power supply and hardware import reliance loom large.
Looking ahead, 60% of new investments by 2030 will target energy, data centers, and defense. The next half-decade could see $800 billion poured in, lifting investment-to-GDP ratio to 37.5% by FY2030.
