India’s booming digital economy is counting on colocation and cloud services to lay down its core infrastructure, a new report highlights. These services are set to power the country’s push toward a $1 trillion digital economy goal, with the overall market projected to hit $1.46 trillion by fiscal year 2030.
Equirus Capital, an investment banking firm, points out how data centers and cloud platforms offer secure and flexible setups that support businesses, big tech giants, and government initiatives. They’re the foundation for everything from everyday apps to advanced AI tools.
At the heart of this growth lie several key layers. First, hardware like semiconductors and electronics manufacturing builds the physical base. Then come data centers and hyperscalers, handling both on-site and cloud-based operations. On top of that, AI model development and real-world applications will drive innovation and widespread adoption.
India’s data center sector is gearing up for a massive expansion, fueled by huge investments. But here’s the catch: demand is growing even faster than the new supply. Capital spending in this space could jump from 175 billion rupees to 575 billion rupees between 2024 and 2030, marking a 23% compound annual growth rate.
In the last year alone, data center supply in India climbed from 75 megawatts to 114 megawatts—a solid 50% boost. Yet demand shot up from 81 megawatts to 122 megawatts, outpacing it by more than 50%. This gap shows just how urgent the need is for more capacity to keep up with India’s digital surge.
What’s fueling this data center and cloud computing boom in India? A massive rise in data use, more companies shifting to the cloud, supportive government policies, and the rise of AI and other cutting-edge technologies.
Looking ahead, players like Adani, Nxtra, and Sify are poised to lead the charge in India’s data center industry. The report predicts over 1.6 gigawatts of new capacity will join the existing 1.3 gigawatts, with Adani Connex, Nxtra, and Yotta contributing around 860 megawatts. This influx will help bridge the supply-demand divide and supercharge India’s digital economy.
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